Flagship Energy’s Tejal Shah Energy Markets Update – 7th February 2024

Tejal Shah, Head of Trading & Risk at Flagship Energy provides a market update

The market this week has been fairly rangebound in the absence of any significant new drivers. Even with Gassco, the Norwegian gas operator announcing two unplanned outages this week which have been extended to the end of the week, the market reaction has been minimal. In the UK and the Continent temperatures from next week will drop below seasonal normal levels increasing demand levels however with supply remaining relatively robust and storage levels remaining comfortable the impact on price may be negligible. Elsewhere the shipping disruptions in the Red Sea continue. The Iran-aligned Houthis have been targeting commercial vessels with drones and missiles since mid-November. Despite the delays and concerns about escalating tensions in the Middle East, gas prices have eased. We are however seeing higher LNG deliveries week on week to Asia from the Middle East and the spread tightening between European and Asian prices. Should this continue, European prices may need to rise to attract more LNG if needed.  On a positive note, US LNG to Europe could potentially compensate should European LNG demand increase over the coming months.

 

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