TOPIC PAGE: Coronavirus impact on energy markets

Author: ICIS Editorial

2020/03/16

LONDON (ICIS)--As the coronavirus spreads around the world and countries implement containment measures, energy supply and demand is being disrupted.

European countries like Italy, Spain, France and Austria are imposing lockdowns and heavy measures to limit the spread of the virus. These measures are likely to pressure prompt and near curve contracts, particularly as warmer weather also reduces heating demand.

The impact that country-wide lockdowns and demand slowdowns will have on energy markets will be evolving every day.

Follow this Topic Page to stay up to date at this unprecedented time with expert insight and analysis of the impact coronavirus is having on energy markets.

LATEST UPDATES

27-Mar-20 09:35

European power and carbon markets affected by COVID-19 – an early impact assessment

KARLSRUHE (ICIS)--In order to assess the fundamental impact of COVID-19 on European power and carbon markets we modelled a scenario in which we accounted for the first data on dropping electricity demand as well as assumed industry production cuts and continued travel restrictions.

26-Mar-20 07:41

India defers on LNG cargoes as lockdown ramps up

SINGAPORE (ICIS)--India buyers are deferring LNG cargoes as ports close operations with strict lockdowns in place. This is a concern for sellers in a long market with India one of the key buyers.

25-Mar-20 16:08

EU to reach 2020 renewables goals on coronavirus, Brexit

LONDON (ICIS)--The combination of Brexit and lower demand associated with the coronavirus pandemic should enable the EU as a whole as well as many member states to reach their 2020 renewables targets, according to ICIS model run.

25-Mar-20 04:00

Global gas markets expecting further weakness during Q2

• European Q2 gas looks bearish

• US producers eye crude prices

• Indian demand may cut Asian LNG prices

LONDON (ICIS)--Global gas and LNG markets could come under further pressure in April as major demand centres in both the European and Pacific basins tighten restrictions to tackle to the coronavirus.

24-Mar-20 17:28

European power markets yet to hit coronavirus demand floor

LONDON (ICIS)--European power demand will continue to drop as governments escalate measures to stem the spread of the coronavirus.

Electricity consumption in Italy and France fell 16% below expectations over the past seven days, according to an ICIS model that controls for the impact of temperatures.

Three other major power markets studied by ICIS - Germany, Spain and the UK - have seen smaller drops, although all are trending down.

23-Mar-20 17:20

Virus demand hit to wipe 9% off 2020 European power prices

• Power demand drop likely

• ICIS model indicates 6% drop in demand during 2020

• Price fall of 9% across Europe

LONDON (ICIS)--A scenario where power demand drops one-tenth through up to June as a result of measures taken to slow the spread of the coronavirus would see power prices across European markets fall by an average 9% in 2020.

In this scenario, Germany and France could see as much as €5/MWh wiped off their average power price this year compared to previous expectations, with the UK dropping a more moderate €1.60/MWh, the analysis demonstrated.

23-Mar-20 17:00

Italian power demand to plunge further as factories shut down

• Demand to enter new phase amid closure of non-essential manufacturing

• PUN Day-ahead to shed value accordingly with demand restrictions

• Italian front-month on track to expire below €25.00/MWh

LONDON (ICIS)--Italy is set for a further slide in its power consumption by 25 March, when all non-essential manufacturing will have to shut down following a decree published on 22 March.

This will likely push Italian power nearer-dated contracts to new record lows amid already weakened power demand.

23-Mar-20 14:36

Weather-driven NBP prompt upside possible in week 13

• Temperatures across NW Europe to tumble in week 14

• British local distribution zone demand to increase

• EAX-NBP premium gaining

Incoming cooler weather across Britain for week 14 could encourage buying across NBP prompt and near curve contracts in the coming sessions. The drop in temperatures will likely trigger a spike in heating demand which has also increased due to large numbers of people working from home to curb the spread of the coronavirus.

20 March 2020, 17:34

Southeast Europe braced for falling demand, bankruptcies

Eastern European and Turkish energy companies are braced for sharp drops in demand and potential bankruptcies as countries introduce emergency measures in a bid to contain the coronavirus outbreak.

Although the spread of the virus is not as extensive in this region as in Italy or Spain, the impact of the emergency measures that have been taken is likely to be felt acutely because national economies are fragile.

20 March 2020, 12:59

VIDEO: European gas consumption could plummet to record lows

20 March 2020, 05:35

Europe on course for sharp reduction to power demand

Power sector demand across key European countries is set for a major slump over the coming weeks as countries scale-up their efforts to tackle the spread of the coronavirus.

Demand in Italy, which has been hit the hardest by the outbreak, has dropped 10% compared to its five-year average for March during the second week of its nationwide lockdown.

As measures to tackle the spread of the virus intensifies across other European countries, a similar drop in demand can be expected, although changes are unlikely to be uniform.

19 March 2020, 10.25

China's city gas demand steady despite coronavirus, uncertain elsewhere

The impact of the coronavirus in China has reduced but gas demand will still end March well down from 2019. City-gate gas demand has been firm but the outlook for other sectors remains a concern.

19 March 2020, 06:00

European gas centres set for April demand destruction

• EU-wide demand crunch could follow after lockdowns intensify

• Residential demand to see brief increase before falling on warmer temperatures

• LNG sellers could struggle to deliver into Europe

18 March 2020, 20:50

ICIS VIEW: Coronavirus effects to ripple in Mexico

Mexico’s economy has perhaps never been more exposed to the global supply chains and commodity markets hit by the shocks of the coronavirus and the oil price war, but its president is losing time engaging in denial and political pandering. These will not help his party’s 2021 election prospects if the country’s economic performance falls further as its currency takes a beating amid capital flight.

18 March 16:37

ICIS VIEW: Clean energy transition will take coronavirus hit

Disruption caused by the coronavirus is likely to slow down the implementation of clean energy legislation throughout Europe.

This has the potential to threaten the efficacy of the carbon market, stall the expansion of renewable capacity and slow coal phase out plans.

18 March 2020, 11:39

French, Belgian TSOs to ensure supply amid falling demand

Transmission system operators (TSOs) in Belgium and France have taken steps to ensure continuity and security of natural gas supply during the coronavirus outbreak.

17 March 2020, 17:47

LNG shipping in Europe adopts virus protection measures

With the severity of the coronavirus in Italy, LNG vessels are now complying with measures to reduce the risk of further virus spread.

17 March 2020, 12:29

German, French lockdown not priced into Q2 power contracts

European electricity markets have not priced in the potential lockdown of France and Germany into near curve power products, traders polled by ICIS said on Monday.

17-Mar-20 06:49

UPDATED: Italian renewable lobbies ask for temporary lift of obligations

Italian renewable energy associations are in talks with national authorities to define a strategy that could alleviate green producers severely hit by the coronavirus-related lockdown in the country since last week.

17 March 2020, 06:31

China's gas demand rebounds - satellite data

Emissions of nitrogen dioxide are on the rise in China. This is an indication that economic activity is rising as businesses and industry ramp up activity with the coronavirus impact subsiding.

16 March 2020, 18:42

ICIS ANALYST VIEW: Spanish virus to impact LNG imports

Spain is home to one third of Europe’s LNG import capacity, so a lockdown has the potential to further gum up the global LNG supply chain if, as seems likely, it leads to a drop in demand for gas and a reduced ability to support scheduled imports.

16 March 2020, 17:14

Spanish lockdown squashes front month energy prices

Expectations of plummeting demand in Spain due to a national lockdown hit the front month power contract by more than €3/MWh on 16 March.

Spain went into a 15-day nationwide lockdown on Monday, with workers asked to stay home to battle the spread of the coronavirus.

16 March 2020, 16:30

European nuclear plant operators gear up to ensure power supply

European nuclear power availability is expected to remain robust with strict safety measures already being implemented by the major plant operators amid the coronavirus outbreak.

16 March 2020, 16:14

Bulgarian power traders call for nuclear maintenance change

Bulgaria’s free energy market association ASEP has called for measures to tackle national power market disruption due to the coronavirus outbreak on 16 March.

16 March 2020, 11:48

Global market moves feed energy downside jitters

Heightened concerns surrounding the economic fall-out from the coronavirus is set to further weigh on European energy markets, traders say.

13 March 2020, 15:59

Coronavirus likely to lower trader appetite for risk

Widespread remote working due to the coronavirus is set to hit European natural gas and power liquidity, according to traders.

A number of firms have already asked traders to work from home or are expected to do so.

While some trading activities around gas and power dispatching need to be done from a trading floor, most other tasks can be done from home.

However, traders indicated it is unlikely to be business as normal with participants increasingly risk averse away from an office environment.

13 March 2020, 15:53

Italian gas demand plunges on coronavirus restrictions

The coronavirus outbreak took a toll on Italian gas demand in week 11 as the government extended nationwide restrictions against the spread of the virus.

If restrictions continue, demand and gas prices are likely to fall further as warmer temperatures follow spring, pressuring consumption for heating. Power prices are also expected to plunge on the back of weaker gas. Gas is Italy’s main source for power generation and the marginal fuel, therefore a price maker for Italian power.

12 March 2020

ICIS ANALYST VIEW: Expect weakness in Chinese summer gas demand

• Coronavirus impact on LNG to worsen

• China’s big three will have sought some LNG volume deferrals as another means by which to deal with the mounting oversupply

• Incremental demand for gas and LNG this summer will be unusually low

6 March 2020

Coronavirus fails to pull down Italian power demand significantly

The Italian wholesale electricity market has so far avoided major losses following the outbreak of the Coronavirus in the country, the strongest so far across Europe.

5 March 2020

PODCAST: Coronavirus and the LNG impact

After the cancellation of CERAWeek in Houston due to concerns over the virus, Global LNG Editor Ed Cox and Americas Editor Ruth Liao discuss the impact on upcoming events and what’s new in the LNG market this week.