This Monday, the NBP (National Balancing Point) experienced a minor market uptick due to maintenance in Norway. EU Sanctions on suspected Russian LNG vessels may have also driven these market changes.
What does this mean?
Unplanned maintenance in Norway reduced export capacity by 38.8 mcm, according to Gassco. Some of the plants affected were Hammerfest, Melkøya, Dvalin, and Visund. This maintenance likely contributed to the market increase because of the supply reduction to the UK.
The European Union sanctioned 27 vessels suspected of being part of Russia’s “shadow fleet” of LNG tankers. Since Russia invaded Ukraine, the EU placed sanctions on Russia in support of Ukraine. However, Russia can transfer their oil and gas cargo onto ‘licensed’ vessels near European ports to remain hidden, hence why the EU stopped these ships.
Summary
Winter-24 gas prices rose Tuesday, at 1.5p/therm (0.05p/kWh) above the previous settlement. Recent high storage levels have softened the impact of the unplanned maintenance at crucial Norwegian plants. The EU sanction on Russia’s “shadow fleet” indirectly impacts the energy market because Russia mainly exports its oil and gas via EU countries. Although the final destination for the LNG might not have been Europe, global supply has decreased. However, demand has increased to compensate for the sanctioned LNG, having a knock-on effect for the EU and the UK, which outsource large amounts of gas and oil.
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