Weekly Market View – w/c 27th January, 2025
Weekly Market View – w/c 20th January, 2025
Market Drivers January 2025
Bearish Drivers
· Stable LNG supply to North Western Europe in February with Europe remaining the premium market.
· A small rise in Norwegian supply to North Western Europe in February amid limited planned maintenance works.
Bullish Drivers
· North Western Europe aggregated storage inventory is forecast to remain well below recent years.
· Residential and gas for power demand were down in February from January, but it is still forecast to be higher than last year, keeping storage withdrawals strong.
Gas prices displayed significant volatility in January. TTF and NBP opened the year at recent highs following the expiration of the contract for transiting Russian gas via Ukraine, marking the end of decades-long supply through this route. Initially pressured by mild weather forecasts, prices reversed to a bullish trend as colder weather predictions emerged and geopolitical risks resurfaced. Reports of a Ukrainian attack on TurkStream infrastructure within Russia, coupled with rising discussions of a potential ban on Russian LNG, further fuelled market uncertainty.
The cessation of 420 GWh/d of Russian supply through Velke Kapusany has boosted flows from Germany to the Czech Republic and Austria by approximately 250 GWh/d, aided by the removal of Germany’s storage levy on intra-country flows. These flows are expected to remain stable in the coming month.
Recent weather forecasts indicate mild, above-seasonal temperatures in February after a cold January. However, February is still expected to be cooler than the exceptionally mild conditions of last year. Total consumption in Northwest Europe (NWE) is projected to average 7,252 GWh/d, down 480 GWh/d from January but showing a significant year-on-year increase of 1,375 GWh/d.
Global LNG supply dynamics are anticipated to remain stable. LNG deliveries into NWE should reach 1,785 GWh/d in February, up 67 GWh/d from January but 42 GWh/d lower than February 2024.
Implied net storage withdrawals in NWE are forecasted to average 3,217 GWh/d in February, a decrease from January’s 4,153 GWh/d but up 1,905 GWh/d from a year earlier, leaving storage levels at 32% by the end of February. This projection is more bullish than December’s outlook, reinforcing a tighter end-of-winter and SUM25 view. Under current balance scenarios, EU-mandated 90% storage fullness by November 1, 2025, appears out of reach without additional LNG supply driven by price incentives. Storage levels are projected at 78% under a mild scenario, 68% under a central scenario, and 56% under a cold scenario—all lower than December’s forecast, signalling a bullish summer outlook. TTF SUM25 contract premiums over WIN25 have averaged €2.62/MWh in January, down from December’s €2.96/MWh.
In a broader context, Donald Trump’s inauguration as the 47th U.S. president on January 20 and his initial policies will be closely monitored by energy markets.