Last week, the European Commission’s EU energy ministers met in Brussels on the 24th of November. The meeting was about finding a political agreement on the newly proposed gas price cap. After the meeting, the Czech minister proclaimed: ’’We are not opening the champagne yet, but put the bottle in the fridge’’. The minister hinted that the champagne may be opened on 13 December, when EU energy ministers will meet for their next emergency energy meeting. Hence, there was little in the way of actual fundamental changes, which provided the market sentiment of a little dip in TTF prices on the 24th, before rising to €125/MWh.
This week, there are a handful of bullish drivers, including the increased demand over the coming days with temperatures holding below normal. Another bullish factor is the drop in renewable production as wind speeds fall. On the bearish side, gas supply prospects are improved as infrastructure maintenance ends in the UK, Belgium and the Netherlands. Thus, this week’s European TTF prices should remain relatively balanced at around €123/MWh, unless something unforeseen happens from the policy side.
The week ahead is going to be busy on the policy front which may provide market sentiment. For example, the EU’s REPowerEU trilogue and additional sanctions on Russia banning oil which is part of the 6th sanctions package will be discussed. Stay tuned for the #energy policy update this Thursday.
