26 October 2022

European Gas Sell-Off Pauses

  • Brent ICE 1st nearby ($/b) 79.53 7.59%
  • TTF ICE Month-Ahead (€/MWh) 76.51 1.19%
  • TTF ICE Cal 2022 (€/MWh) 48.37 5.31%
  • NBP ICE Month-Ahead (p/th) 190.38 -.38%
  • Henry Hub NYMEX ($/MMBTU) 5.71 14.46%
  • NE Asia LNG JKM Platts ($/MMBTU) 28.90 9.29%
  • API 2 ICE Cal 2022 ($/t) 149.06 18.25%
  • DE EEX Base Cal 2022 (€/MWh) 113.91 8.18%
  • FR EEX Base Cal 2022 (€/MWh) 118.32 8.05%
  • EUA ICE Dec'21 (€/t) 64.37 6.08%
  • Gas has sold down from the highs.
  • NBP and TTF pricing is still headed for the most significant monthly decline this year.
  • Heating demand is low on the back of above seasonal average temperatures.
  • Gas storage levels in the EU are currently at 92%.
  • The sell-off has paused as key EU measures to contain the energy crisis were pushed back further.
  • NBP and TTF gas prices had moved lower amid further signs that soaring energy costs are crippling economic output.
  • On Tuesday, European Union energy ministers set another deadline of November 24th to agree to the deal’s structure.
  • Germany, which is highly dependent on Russian gas to power industry and household heaters, is particularly exposed to the crisis.


Charles Ward Head of Renewables for NSR

Charles Ward
Head of Renewables

“Weather will be key now for gas and, ultimately, PPA pricing. It’s delayed the heating season, and we continue to see high imports of liquefied natural gas on the supply side.

This unseasonable act has allowed even more gas to be injected into storage. But the test will be if or when the weather turns colder. If it stays relatively mild, we don’t need to draw down the storage inventories.

Also, it will be interesting to see how people’s behaviour and price sensitivity around putting on their domestic heating will play out on the  demand side.”

Fran Reay
Market Analyst at New Stream


“If you look at gas prices, we are still about three times higher than normal for this time of year, which is putting pressure on the economy and inflation. But there has been a big sell-off this month.”




Low demand and high import volumes move LNG to Asia

  • Plentiful LNG in the short-term market means some cargo is diverted to Asian markets.
  • Asia LNG spot prices jumped above the European gas benchmark for the first time  since June.
  • Bearish price signal for European gas pricing.


PPA Manager

Jamie Banks
PPA Manager at New Stream

“There is too much LNG in Europe and insufficient import terminal capacity.

That is putting huge pressure on spot prices across the key gas trading hubs and prompting traders to look to divert cargo to Asia if there is no destination clause in the contract.”




UK Power and PPAs:

  • Political turmoil and uncertainty around government intervention on renewables cap is impacting pricing and contracting.
  • Contracting credible and commercially robust PPAs is more challenging than ever.
  • Gas is still the main driver of PPAs and UK power.
  • Strong Wind is putting pressure on spot and cash-out PPA structures.
  • Price volatility returns at the front end of the curve.
  • Generators are looking at current market strength as a PPA fixing opportunity on a relative value basis.
  • We have seen most generators fix for 24 months and are now looking at 2025 fixings.