The market opened on a bullish note on Monday, with the Winter-24 contract up 3.25p/therm (0.11p/kWh) from its last settlement. Future contracts showed slight movements, with most increasing in response to constant volatility seen around the globe. European hubs in particular are currently monitoring the strong European gas storage levels and the Ukrainian march into Russia’s Sudzha area.
What does this mean?
Ukrainian forces have now taken control of the Sudzha nomination point in Russia’s Kursk region, which is a key location for the remaining Russia-EU pipeline flows. Ukrainian troops have reportedly advanced up to 30km into Russia, but gas flows continue as normal. Putin has labelled the retaliation a “large-scale invasion,” leaving industry experts on edge- anxiously expecting Russia’s response.
Once again, EU storage levels are above average, at 87.26% as of the 10th August. Nearing around 7% higher than the 5-year average, this robust supply has boosted confidence for the winter trading season.
Summary
The market opened with bullish sentiment on Monday, with the Winter-24 front season contract trading around 3.25p/therm (0.11p/kWh) above its previous settlement. This increase in the market is most likely due to the occupation of Sudzha. It is also likely that the fuller storage supply across Europe has capped these increasing gas prices.
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