TOPIC PAGE: Coronavirus impact on energy markets

Author: ICIS Editorial

2020/10/15

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

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

15 October 2020 11:46

Renewed lockdown may fail to weigh on Italy’s demand

  • Italian demand set to remain lower than in 2019
  • Renewed lockdown expected to have limited effect on demand
  • Milder temperatures to underpin downside in remaining Q4 contracts

LONDON (ICIS)--A mild winter outlook will likely be the dominant driver for Italian power contracts over the remainder of the fourth quarter, while renewed lockdown restrictions may play a more marginal role, Italian power traders told ICIS.

Italy looks unlikely to call for a shutdown of industrial sites, the sole measure which would have a real disruptive impact on the country’s demand.

14 October 2020 16:30

INTERACTIVE: European power demand improving but outlook mixed

Power demand across Europe has slowly recovered since June with lockdown restrictions easing, the end of the holiday period as well as businesses and schools reopening.

In September, demand across the 13 European countries analysed by ICIS stood only 2% below the five-year average, up almost five percentages points compared with June.

Since the coronavirus pandemic started, April saw the biggest European power demand drop of 13% below the 2015-2019 average.

13 October 2020 16:18

Belgian power oversupply looms on rising nuclear, constrained demand

Belgian electricity demand is set remain lower compared with the 2015-19 average amid relatively mild weather for weeks 43 and 44 and increasingly strict coronavirus measures imposed in the country.

Low demand prospects and robust nuclear availability suggest a bearish outlook for Belgian power prices (ICIS paywall) over the coming weeks.

31 July 2020 16:37

Southern Europe power demand surging but could fall back

Electricity consumption in Spain and Italy has recovered close to normal seasonal levels, according to ICIS models that control for temperature and calendar effects.

This may not sustain though into the autumn, and with coronavirus cases rising once more, the recovery could be even shorter lived.

29 July 2020 10:45

Further downside ahead for power on fresh virus fears

Traders active on European power markets anticipate downside for prices especially in the event of a return to stricter coronavirus-prevention measures across the continent.

Governments have reintroduced partial restrictions to slow the spread of the virus, both on a regional level this week in Catalonia in Spain and on a national level in Belgium. Speculation regarding a second wave of the virus in Europe has already exerted a bearish influence on power forwards.

30 June 2020 10:45

French power demand recovery outstripping other countries

Electricity consumption in Europe’s five largest countries was around 8% below expectations during week 26, according to ICIS models that control for temperature and calendar effects.

France was the clear outlier, with demand recovering to within 2.2GW or 4.8% of expected power use between 22-28 June.

24 June 2020 10:45

INTERACTIVE: European power demand recovery halts

Power demand across Europe continued its tentative recovery through June, although growth has been impeded by weaker consumption in the tourism and hospitality industries.

The average year-on-year power demand drop against the five-year average across the 13 European countries analysed by ICIS has eased since widening at the start of June.

But at -8.7%, the demand drop in the month to date remains one percentage point greater than in May.

18 June 2020 17:12

Italy’s power demand to observe limited growth during summer

The Italian power demand will likely be supported during the third quarter as coronavirus-related restrictions, including a ban on international travel, have been progressively eased in recent weeks.

However, traders remain only cautiously optimistic. The uncertainty is partially due to consumption levels so far struggling to restore the values they had both before the pandemic and over summer months in the past five years.

Concerns about a new coronavirus outbreak seem to be also deterring market participants from betting more heavily on a summer recovery. Even if a second wave of the pandemic is avoided, activity in the tourism sector is likely to remain muted, curbing demand expectations.

3 June 2020 06:00

Demand slow to recover in Europe's largest gas markets

Gas demand struggled to recover in key European countries in May as coronavirus-related restrictions and mild weather kept a lid on consumption in France, Britain, Italy and the Netherlands.

Germany continued to be the least affected by the restrictions among the largest gas markets, while consumption rose in smaller central and eastern European countries.

Demand is likely to come closer to the 2015-2019 average in the weeks ahead as countries loosen restrictions further, although fuller storage sites year on year will likely mean lower injection-related demand.

21 May 2020 14:11

European gas markets plunge despite US LNG cancellations

Europe’s most liquid gas markets continued to plummet in early trade on Thursday morning with the Dutch TTF and British NBP front-month breaching the €4/MWh and 10p/th support levels.

June and third-quarter gas contracts all collapsed despite a sizeable amount of US LNG being cancelled for July , as market participants’ fears continued over limited demand and filling European gas storage.

4 May 2020, 16:20

INTERACTIVE: Demand recovery in sight on tentative lockdown ease

The coronavirus-driven demand destruction began to show signs of easing in parts of northwest Europe as governments mull further relaxing of lockdown restrictions.

Comparatively, most central and southeastern European countries faced a further demand drop as more stringent lockdown measures were introduced late last month.

22 April 2020, 06:09

European electricity demand rebounding amid coronavirus lockdowns

Power consumption has partially recovered in most of Europe’s largest countries in recent days and weeks, according to ICIS models that control for the impact of temperature, calendar effects and seasonality.

This shows not only that demand has reached a floor in most of these countries, but that factories and other large energy users have found ways to reopen at least in part in the face of lockdowns aimed at stemming the spread of the coronavirus.

21 April 2020, 17:11

Virus exacerbates Easter demand slump across Europe

European countries continued to experience a drop in power demand over the past two weeks as industrial and commercial closures remained in place to stem the spread of the coronavirus.

An interactive graphic built by ICIS demonstrated that almost all European countries examined had now succumbed to a demand drop of more than 10% in both weeks 15 and 16 relative to the five-year average for April.

16 April 2020, 15:38

Slump in wind expansion may support German power prices

The recent slump in German wind capacity is likely to continue this year as complicated regulations and weakness in the global economic outlook due to the coronavirus are likely to dampen investment in the renewable technology.

This has the potential to restrict future additions to wind output, impacting supply and, in turn, supporting power prices.

14 April 2020, 14:20

Chinese industrial gas demand remains weak in March

Chinese natural gas demand from the industrial sector in March was down by almost 25% year on year, according to the Chongqing Gas and Petroleum Exchange released over Easter, as the impact of the coronavirus continued to weigh on consumption.

8 April 2020, 16:11

Reduced energy offtake likely to hit UK suppliers

A growing number of British energy suppliers could be at risk of collapsing through reduced energy offtake and cash-flow constraints amid the coronavirus pandemic, according to industry sources polled by ICIS.

8 April 2020, 07:00

INTERACTIVE: Breakdown of European power demand impact 

Power consumption continued to soften across key European demand centres through March and the first week of April, while less stringent measures and colder weather has sheltered other parts of Europe.

7 April 2020, 14:58

Coronavirus, Brexit set to ensure EU 2020 renewable goals

While the coronavirus outbreak is already having a significant impact on the European renewables sector, one unintended consequence of the pandemic is likely to be the achievement of EU and member state binding renewable energy targets for 2020.

This is due to the consequences of a prolonged downturn in demand, which will not be normalised for by the EU’s official statistics office (Eurostat), meaning that renewables look set to make up a higher share of consumption in 2020 across the EU.

7 April 2020

Coronavirus to hit LNG demand at world's largest importers

LNG demand in 2020 from the world’s three largest importers is now set to fall year on year, ICIS forecast today.

Read the ICIS press release here.

6 April 2020, 15:02

Spanish prices stay bearish but premium to France to persist

Spanish power prices across the curve are expected to maintain a bearish trajectory throughout the nationwide coronavirus lockdown period which was recently extended until 26 April, with further extensions possible.

Nevertheless, forecasts for below-average wind generation would support Spanish spot prices,  allowing France to continue exporting power to Spain. This in turn should keep Spanish near-curve contracts at a premium to their French equivalents.

06 April 2020, 16:02

Coronavirus hits truck-loaded LNG demand

Market sources have indicated the coronavirus has reduced demand for truck-loaded LNG around Europe, as countries have implemented lockdown measures and low oil prices have made gas less competitive as a transport fuel.

Data from terminals in northwest Europe shows the impact has not been as significant as originally thought.

03-Apr-20 12:07

Europe has found a coronavirus electricity demand floor

Electricity consumption has levelled out in Germany, France and Italy, after falling for several weeks due to restrictions aimed at stemming the spread of the coronavirus.

But in Great Britain and Spain, demand has continued to drop week on week in recent days, according to an ICIS model that controls for the impact of temperature across Europe’s five largest consumers of electricity.

27-Mar-20 09:35

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

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

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

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

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.

European power markets yet to hit coronavirus demand floor

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

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

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.