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    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.

    Click here to discuss your business energy challenges.

      Bearish

    • 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.
      Bullish

    • 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.