The market remained heavily influenced by the weather in January. The start of the month was mild, windy, and wet, depressing the market. The second half of the month was colder and drier, leading to temporary, minor, price increases. The 12m pricing for Apr23-Mar24 decreased by 28% overall from the start of the month; decreases were seen despite an increase in LNG cargoes diverting to Asia.
Power pricing has returned to a level only seen prior to the Russian invasion of Ukraine. Europe has now successfully replaced over 80% of previously Russian-sourced natural gas; the influence of the war on future pricing remains uncertain.
The start of the month saw power prices decreasing. Windy weather was experienced from the 01st – 12th of January; this was coupled with strong LNG supplies up until the 08th of January. However, Asian LNG prices began to catch up with, and surpass, the European market. Risk remained that LNG cargoes would be diverted to Asia in response.
Pricing between the 12th – 17th of the month was volatile, with prices creeping up, then down, responding to weather predictions and LNG supply. Any increases seen in this period were minor, and quickly lost. Whilst some LNG was diverted to Asia, a surge in LNG cargoes depressed prices between 17th – 20th January.
Some fears around gas supply from 23rd of the month onwards fed into the power market. Increased demand for LNG in Asia led to price rises. This, coupled with cold and calm weather predicted in Europe, saw power and gas prices creep up. Yet, increases were unable to recoup losses seen throughout the month.
The Greenspan Agency produce the report on a best endeavours basis and has been supplied for your interest; the facts in this report are for background information and should not be relied upon exclusively for decision making.
If you have any queries about the content in this report, please contact amy@greenspanenergy.com or lara@greenspanenergy.com.
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