Storage positioning lifts NBP, TTF liquidity in March 2017

03 April 2017 15:27 Source:ICIS

Trade on the near curve and quarterly contracts in particular lifted the total volume traded at the NBP and TTF year on year in March, according to trade data collated by ICIS.

A total of 1,883TWh was dealt at the TTF and 1,487TWh at the NBP in March, up 22% and less than 1% respectively year on year.

Increased trade of quarterly-delivery periods was a key driver of the upwards trend at both hubs, as shippers moved to adjust storage positions ahead of the new cycle in light of the capacity restriction and uncertain future capability of Rough in Britain.

At the NBP trade of the front quarter fell by around a third year on year, with injections into Rough unavailable until at least the third quarter of the year. Trade of the third and fourth quarters ahead – the components of the front winter – more than doubled however, while the second quarter out recorded a traded volume increase of 20% year on year.

Trade on all four of the front quarters at the TTF grew year on year, but unlike at the NBP the focus was firmly on summer delivery. This was likely due to the increased role that continental storage sites – which in any case are much less full than last year – will play to help cover Rough in the seasons ahead.

TTF

Brokered trade at the Dutch hub rose by 8% year on year to 1,297TWh in March, according to ICIS data, accounting for 69% of the TTF total. A record-high volume of more than 483TWh was dealt at the ICE exchange, with an 11-month high 103TWh dealt at the PEGAS exchange.

In addition to strong trade of the TTF quarters, the Dutch front-month contract was also a key factor behind the year-on-year increase in volume. Smaller growth was recorded on all other curve contracts with the exception of the front summer and calendar year products beyond Cal ’18.

Trade on the Dutch prompt fell due to unseasonably mild conditions and low weather-driven gas demand.

NBP

The total volume traded at the NBP was fractionally higher year on year in March as ICE exchange trade rose sharply to an 11-month high of 809TWh, offsetting a similar drop in the brokered market.

According to ICIS data, over-the-counter trade totalled 677TWh in March and accounted for around 46% of the NBP total.

ICE data showed a 17% and 76% year-on-year increase in trade of NBP months and quarters respectively in March 2017, with a 6% drop in trade on the seasons.

Over-the-counter trade at the NBP was down on most contracts, with the exception of the Day-ahead, later-dated months, later-dated quarters and later-dated seasons in particular.

As uncertainty regarding the long-term capability of Rough continued to build, liquidity on the NBP seasons beyond the front summer and winter surged ahead of the TTF for the first time since May 2016. jake.horslen@icis.com

By Jake Horslen