Flagship Energy’s Tejal Shah Energy Markets Update – 18th October 2023

Tejal Shah, Head of Trading & Risk at Flagship Energy answers key questions about the markets

What’s happening in the markets and why?

Whilst the UK and European gas markets have eased from last week’s highs, geopolitical concerns continue to drive market sentiment. Tensions appeared to be easing on Monday however a blast killing hundreds at a Gaza hospital yesterday sparked concerns about potential oil supply disruption in the region. The gas market also appears to be ignoring fundamentals which appear to be quite comfortable and positive news from Australia. Today an Australian union alliance agreed to endorse deals on pay and conditions at Chevron’s two liquefied natural gas facilities, ending an impasse that had led workers to threaten renewed strikes this week. The breakthrough followed days of talks mediated by the Fair Work Commission, to try and revive an in-principal deal reached in September that ended weeks of strikes. That fell apart earlier this month after unions said Chevron had reneged on commitments. Hopefully, this is now an end to ongoing saga. Looking closer at the fundamentals, warmer temperatures are weighing on demand, European storage levels are around 98% and Norwegian flows continue to ramp up.

What should energy buyers look out for?

It’s worth keeping a close eye on the developments in the Middle East and any developments with the investigation on the Balticconnector. Whilst fundamentals may not be affected, risk sentiment can move prices disproportionately.

What would you recommend?

Review your positions if you have left volume open in the winter season. Looking forward to next year, depending on your risk appetite you may want to consider taking some cover.

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