Temperatures have remained above seasonal normal levels well into November, suppressing gas for heating demand as we approach the coldest period of the year. On 12th November, UK average temperature peaked at over 5°C above seasonal normal levels. The unseasonable warmth has weighed heavily on the day ahead market price over the previous week, with DA gas dropping to 63p/th for only the second time since April 2024.
Strong gas flows have also supported this bearishness in the first days of w/c 10th November. With the shoulder-period maintenance all but complete, exit nominations from Norway are now at the 340mcm/d mark, near peak flow levels. LNG sendout to the UK has been robust, with Milford Haven sending out close to 50mcm/d to accommodate a strong delivery schedule.
Wind generation has also contributed to a relatively loose balance of supply and demand early this week, with the UK wind fleet expected to generate slightly above seasonal normal levels until 18th November according to the latest forecast run.
Despite warmer weather, the EU’s aggregate gas storage fullness has now begun to drop consistently, amid strong withdrawals from facilities in France, Germany, the Netherlands and Italy. Stockdraw will likely increase into early w/c 17th, with temperatures currently expected to plunge by temperatures plunge by approximately 10°C week-on-week.
In the US, Golden Pass LNG drew closer to startup as a cooldown cargo left Qatar’s Ras Laffan destined for Texas as part of the final commissioning of the project.
In geopolitics, Yemen’s Houthis confirmed that their attacks on shipping in the Red Sea have halted, following the US-brokered ceasefire between Israel and Hamas.
