Next week’s European natural gas price continues to climb

22 February 2018 12:09 Source:ICIS

The working days next week (WDNW) natural gas price at both the British and Dutch hubs continued to gain ground on Thursday morning, with the NBP product dealing 6.3% higher than the previous close, while the TTF product was up 7.5%.

Trade data submitted to ICIS showed that around 10:00 London time, WDNW at the NBP dealt at 66p/th, placing it at a premium of 4p/th to where Day-ahead was dealing at that time.

While the Dutch WDNW jumped €1.65/MWh, between Wednesday’s close and 10:00, it was still dealing at a discount of €1.814/MWh to the same product at the British hub, highlighting the supply risk next week’s plummeting temperatures pose for NBP traders.

On Thursday morning, WSI forecast that temperatures in Britain over the coming five days would be around 6°C below the seasonal norm, while on the European mainland 8°C below the late-February average is expected.

The freezing weather will lead to unseasonably high gas demand from the heating sector at a time when winter stocks are beginning to empty. Shippers are likely to increase pipeline imports to meet the higher consumption.

Domestic demand within Russia is likely to be very high next week too – with temperatures around Moscow possibly 14°C below the seasonal norm – which could limit unusually high exports towards the EU.

That said, Russian flows via Ukraine into Slovakia on Thursday were nominated at around 110mcm. If this volume is delivered, it will be the most gas sent via this route since 3 January, data from Slovak operator Eustream shows.

British operator National Grid on Thursday morning forecast Monday demand at 382mcm, almost 18% higher than expected within-day consumption, and returning off-take to levels last seen at the start of February.

The Day-ahead at the NBP, TTF and German NCG were all up by around €1/MWh by 11:00, relative to Wednesday’s finish.

Between 10:00 and 11:00 the WDNW product at both the TTF and NBP lost some value.

By Tom Marzec-Manser