European Gas Prices Above 100 Euros:
- European TTF and UK NBP gas up again on the back of low Russian flows.
- Russian flows to Europe remain well below historic levels at a time when storage is short.
- European storage is 10% lower month on month.
- On average, European storage is 70% full compared to the historical average of close to 90% at this time of year.
- UK spot gas price last traded around 250p/th.
- Gas for power demand is around 50 mcm.
- We are expecting one more LNG cargo this week.
UK Power and PPAs:
- Lower wind generation has increased spot market pricing levels and volatility.
- Wind represents around 30% of the overall power generation stack.
- Weather forecasts suggest that the wind will reduce into the weekend.
- Wind forecasts are again key to short term pricing.
Key Drivers:
- Wind generation.
- Russian gas flows and European storage levels.
- LNG cargos.
Carbon:
- The UK ETS CCM (Cost Containment Mechanism) has been triggered for December.
- By no later than the 14th of December, the ETS authority will consider what intervention to make to address the sustained price movements.
- Germany’s government has provisionally agreed to ensure the carbon price will not fall below €60 in the long term.
