Weekly Market View – w/c 10th July, 2023
Weekly Market View – w/c 3rd July, 2023
Market Drivers June 2023
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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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– Gas storages in North West Europe are forecast to end July at 458TWh, substantially narrowing the lag to the previous record stocks observed in 2020.
– Lighter Norwegian maintenance schedule in July compared to June, particularly when Nyhamna shutdown ends 15 July.
– Risk for NEW storages to be full before the end of the injection season. This should ensure the bearish pressure to return.
– Demand destruction in industrial and gas for power sectors to continue to stay strong.
– Warmer than normal weather forecast for July should see a LDZ demand remain heavily subdued
– Risk of further delay in Nyhamna return likely to provide bullish sentiments until the return becomes a fact, any extension should be a bullish factor.
– Our forecast sees a small increase in gas for power consumption next month.
– Potential for higher gas for power generation with the cooling demand (particularly in France) rising further.
– Expectation for lower total North West Europe & UK LNG sendout in July on the back of stronger cooling demand in Asia, and several planned supply maintenances
June saw a change to the bearish movements seen all year, with volatility creeping back into the market amid heavy LNG shortfall from the US as cargoes were directed to Asia. Last month saw the shutdown of several core Norwegian gas facilities, tightening the European gas market significantly. There was
also the unplanned outage at Nyhamna processing plant on the 13th of June for an additional three weeks.
Having said this, the fundamental view of many traders for the remainder of summer is bearish with ample gas storage in Europe, which is on track to be full prior to the 1st November deadline. Norwegian maintenance for July is also expected to be much lighter, which should help weigh down prices. Although further extension of Nyhamna beyond the scheduled return on 15th July is an important bullish risk for prices next month. LNG sendout is expected slightly down in July compared to June with demand from Japan and south Korea expected to ramp up amid increasing cooling demand.
Overall, July is expected to be a soft month with a continuation of stable fundamentals.