Market Drivers – October
We understand the business energy market can be challenging.
Our specialists compile a Market Drivers report each month.
We have highlighted Bearish drivers, expected to contribute to the market lowering, and Bullish drivers, expected to contribute to the market going higher.
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- Stronger Gas production from Norway and potential for small increase in UKCS (The UK Continental Shelf ) production compared to winter 2020.
- A milder than usual winter in Asia and or Europe would lead to a reduction in heating demand and improve global LNG supply availability as well as reducing storage risk.
- EU pressure around inflationary concerns on energy prices could see a faster than expected decision by German regulators and the EU regarding Nord stream 2 leading to earlier flows.
- COVID-19 restrictions could return this winter and restrictions could impact industrial demand as observed last year.
- European Storages below the five-year average heading into winter.
- Risk for no flows via Nord Stream 2 in Q1 given that certification can take up to 6 months from September.
- LNG import forecast is weak and uncertainty with competition versus Asia set to continue and underpin prices.
- Related fuel volatility can impact gas prices despite strong fundamental drivers, both Coal and Carbon have bullish outlooks for Q4.
- No opportunity for any gas to coal switching in Q4.
- Dutch production decline and phasing out of Groningen next year.
- An exceptionally cold winter in both Atlantic and Pacific basins would be catastrophic for Asia and Europe, exacerbating gas price and volatility.