European gas prices stepped up last week due to changes in the Norwegian offshore summer maintenance schedule. Some 0.5 bcm more production capacity y/y will be affected by outages over the summer, a revision from having moderately less production affected y/y.
The rest of April is forecast to be warmer than normal, and we expect aggregate demand in NW Europe to average about 0.55 bcm/d in the week through 20 April, down by a hefty 0.11 bcm/d w/w and 0.20 bcm/d y/y owing to sharp falls in res-com heating demand.
Last week, total supply into Northwest Europe averaged 0.75 bcm/d. In the week through 20 April, we expect aggregate supply to drop to an average of 0.73 bcm/d down by about 16 mcm/d w/w and 43 mcm/d y/y owing to lower Norwegian and Dutch supplies.
Outages cut Norwegian flows last week, as Gassco added several planned cuts to its schedule. Ongoing cuts to Karsto, Heimdal, and one at an unspecified field lead us to expect Norwegian flows to remain lower y/y in the week to 20 April, at an average of about 0.31 bcm/d. We expect UKCS flows to be unchanged w/w at about 0.11 bcm/d as the only constraint is a North Morecambe outage, which is expected to only limit flows today (16 April) by 8 mcm/d.
Net Russian flows into NW Europe averaged just above 0.20 bcm/d in the week to 13 April, 9 mcm/d lower w/w but up by 42 mcm/d y/y. We expect nominations for Russian flows will be unchanged at 0.20 bcm/d in the week to 20 April, to compensate for lower y/y Norwegian flows, despite falling end-user demand. We forecast Dutch production to continue to slow with the arrival of milder weather, with flows of 56 mcm/d, down by 9 mcm/d w/w and 61 mcm/d y/y.
In the week to 15 April, Northwest European LNG port receipts totalled 0.41 bcm, 0.17 bcm lower w/w and 0.28 bcm less y/y. NW European LNG sendout averaged 65 mcm/d, unchanged w/w and down by 9 mcm/d y/y. Port receipts are set to be slightly higher y/y this week, by 52 mcm at 0.38 bcm. We forecast sendout will be almost flat at 66 mcm/d, but be down by about 13 mcm/d y/y.
The y/y European storage gap widened by 0.4 bcm w/w to 10.0 bcm on 14 April, as although last week recorded a stockbuild, it was lower y/y. However, we expect the gap to start to narrow over the next two weeks as low res-com demand will help quicken the pace of injections. We forecast a NW European stockbuild of 1.3 bcm in the week through 20 April, 1.0 bcm more y/y.
The TTF M+1, at 19.5 €/MWh this morning, was still trading between the same two fuel-switch triggers as last week. Those triggers now sit at 19.0 €/MWh and 21.1 €/MWh due to price gains last week in coal and carbon. We still see the May-18 contract bound by these triggers over the coming weeks, but prices should head to the lower trigger as the y/y storage gap starts to narrow.
|Supply-demand outlook and storage forecast for NW Europe, mcm|
|Source: Country SOs, GIE, Energy Aspects|