Low liquidity on the curve dragged the total volume traded at the British NBP and Dutch TTF gas markets down year on year in the first month of summer, according to broker and exchange trade data collated by ICIS.
A total of 1,248TWh was dealt at the TTF and 1,136TWh at the NBP in April, down 35% and 30% respectively year on year.
At both hubs, reduced activity on seasonal delivery contracts was the key driver behind the year-on-year contraction in liquidity. This may have been driven by increasing uncertainty about the winter 2017 supply outlook in northwest Europe.
In addition to an outage at Rough which will mean almost no gas will be available for withdrawal from the site this winter, the Dutch economy minister on 18 April signalled his intent to reduce the Groningen production cap by 10% to 21.6 billion cubic metres for the year beginning 1 October 2017.
The field has historically provided seasonal supply flexibility to northwest Europe, but can no longer fulfil this role and the reduction in low-calorific gas production is likely to increase demand for high-calorific gas for conversion.
In the brokered market, trade of the TTF seasons fell 46% to 228TWh, due in large part to a 28-month low in volume dealt on the front season. Seasonal TTF trade via the ICE exchange fell 31% to 127TWh.
At the NBP, brokered trade of the seasons fell 47% year on year to 186TWh, with ICE exchange volume on the same products down 40% at 228TWh.
Brokered trade of Dutch gas fell 38% year on year to 856TWh in April, according to ICIS data, accounting for 69% of the TTF total.
Exchange trade fell 29% to 392TWh, split approximately 83:17 between the ICE and PEGAS exchange platforms.
In the brokered market, trade on prompt and quarterly delivery periods and the front month all fell in April 2017, which failed to offset the larger drop in trade on seasonal and annual contracts. Only trade on longer-dated months bucked the trend, which was likely driven by some shippers optimising summer storage positions.
ICE exchange trade also saw drops of between 23-69% on quarterly, seasonal and annual delivery periods, although trade of the TTF months were up 47% year on year.
Brokered NBP trade was down 39% on April 2016 at 483TWh, with poor liquidity on the front month and front quarter compounding the drop in trade on seasonal delivery periods.
Exchange trade via the ICE bourse fell 22% to 653TWh. Trade on the NBP quarters rose year on year in April, but failed to offset a 15% and 40% drop on the months and seasons. email@example.com