Yesterday, the electricity front year Base showed a recovery compared to the previous trading day and rose by 1.7 percent to a closing price of 87.55 euros/MWh. Frontmonat Base saw a significant increase of 3.3 percent and closed at 90.12 euros/MWh. The gas market was once again the driver of electricity prices: The TTF gas front year also rose in price and rose by 2.0 percent to 40.07 euros/MWh. The TTF gas front month rose by 2.6 percent to 41.08 euros/MWh. The background was reports of delays in planned LNG projects and an unplanned failure of a production plant in Norway. The EEA December 24 contract recorded an increase of 0.7 percent to 62.31 euros/t CO2. On the coal market, the API #2 coal front year lost slightly in value and fell by 0.6 percent to 122.00 US dollars/t. The BrentCrude front month rose by 2.8 percent to 76.18 US dollars/BBL.

Unplanned outage in Norway

An unplanned outage on the Sleipner B platform of Norwegian energy company Equinor due to a fire has reduced gas production by 7 million cubic meters per day (mcm/d) and drove up TTF gas prices. The indefinite duration of the outage further increases the price pressure, although the amount of the default of 7 mcm/d cannot be estimated to be particularly high. However, the Ras Laffan LNG plant in Qatar is currently also being serviced, which is making the global gas market nervous anyway. Delayed LNG projects postpone next supply wave to 2027 The next wave of LNG supply will be postponed to 2027 due to project delays, instead of 2025 as originally forecast, according to Gregory Joffroy from TotalEnergies at the Asia Gas Markets conference, according to Reuters. The reasons for the delays include a shortage of skilled workers, rising wages and a lack of equipment in the USA. In addition, President Biden's pause in approving new LNG export projects has led to further uncertainty. At the same time, however, LNG demand is expected to rise by 2035 as suppliers switch from coal to gas-powered power generation and renewable energy continues to develop. Gas is seen as a solution for intermittent power generation through renewable energy sources. LNG buyers are demanding more flexible contracts due to fluctuating demand Japan and other major LNG buyers are demanding more flexible contracts to adapt to fluctuating electricity demand, according to Reuters. While providers such as Qatar prefer long-term contracts to secure financing for large projects, buyers are increasingly looking for short-term arrangements with the ability to resell excess supplies. Japan's LNG demand is falling due to nuclear plant restarts and the growth of renewable energy, although the pace of this decline is unclear. In China, electricity demand fluctuates depending on the season and region, making it difficult to plan the supply. With changing market conditions, both suppliers and buyers are more open to more flexible contract structures. In the future, intermediaries will play an important role in bridging the gap between the long-term needs of producers and the fluctuating demands of buyers. Russia's share of the European LNG market is growing despite EU concerns Russia's share of the European LNG market has continued to rise despite EU concerns. In the first half of 2024, Russia's share of EU LNG imports rose to 20 percent, compared to 14 percent in the previous year, according to a report by the Agency for the Cooperation of Energy Regulators. Despite a general decline in gas demand in Europe, Russian LNG remains an important part of the EU's energy security. Although EU LNG imports in the third quarter reached their lowest level since 2021, Russia's share of LNG was expanded during this period. The EU is trying to reduce its dependence on Russian gas, although supplies continue to flow. France and Belgium are calling for increased controls, but an action plan from the European Commission to speed up the phase-out is still pending.

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