Central Eastern Europe – Jan 2018

Published at 17:12 8 Feb 2018 by . Last edited 15:12 5 Nov 2018.

Another month of mild weather cut gas demand in the Baumgarten region in January 2018, allowing the y/y storage surplus to be extended.

HDDs in the region were between 22-36% lower y/y in January and by as much as 18% below the past five-year average. Indeed, it was the mildest January in at least 10 years in Austria, the Czech Republic and Hungary. Aggregate Austrian demand dropped by a hefty 0.36 bcm (27%) y/y to 1 bcm in January, the largest monthly y/y drop since at least 2014, while Czech demand fell by 0.37 bcm (26%) y/y to 1 bcm, the largest y/y drop since at least 2013. 

Lacklustre demand led customers to turn down Russian nominations last month. Russian pipeline supply into Europe edged down by 2.1 bcm y/y to 13 bcm, with the majority of the decline logged on the Central European routes into Hungary, Slovakia and Romania. It was the first monthly y/y decline of Russian supply since March 2017. Countries in the Baumgarten region subsequently turned down pipeline exports, accommodating slower Russian supply and low demand. Austrian exports into Italy slumped by a chunky 1.5 bcm (47%) y/y to 1.7 bcm, the lowest monthly delivery since March 2017.  Austrian exports into Hungary fell by 70 mcm (22%) y/y to 0.24 bcm. German imports into the Czech Republic slowed by 0.3 bcm (9%) y/y to 3.2 bcm. Gross imports into Poland edged up, by 80 mcm (2%) y/y, but gross exports rose by 40 mcm (2%) y/y. Slightly higher imports helped offset a 20 mcm (14%) y/y drop in LNG sendout from Poland’s Swinoujscie terminal. Kpler data show that Polish LNG receipts were unchanged y/y at 0.14 bcm in January, while Lithuania did not take any LNG, also unchanged y/y.

The Baumgarten region pulled 4.4 bcm from storage in January, 0.62 bcm less y/y, leaving stocks at 12.1 bcm on 1 February and widening the y/y surplus to 3.1 bcm y/y from 2.5 bcm at the start of January. Ukrainian stocks closed at 12.4 bcm, up by 2.6 bcm y/y.

The TTF-AVTP D+1 basis was flat in January, compared to the -54 cent/MWh discount the TTF averaged to AVTP D+1 prices a year earlier. Weather was mild in the Netherlands in January, but tighter domestic supply helped push Dutch prompt prices above those at the AVTP on 10 days last month.

Weather in the Baumgarten region has been colder y/y over the first week of February, boosting heating demand. But temperatures in Central Europe are forecast to rise above the seasonal average on 8-17 February, which should help ease consumption.

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