Last week, Dutch day-ahead gas prices rose to converge with month-ahead ones. Germany completed the construction of its first floating LNG terminal at Wilhelmshaven, in a bid to diversify its natural gas supply. The past months have seen German companies close LNG supply deals with entities including the UAE’s ADNOC and Australia’s Woodside.
This week, Qatar signed a 27-year LNG deal to supply China’s Sinopec. The 5 bcm per year agreement dwarfs those made by Germany. Negotiations between Germany and Qatar still have not resulted in a deal closure, as Qatar’s desire for long-term agreements clashes with Germany’s aim to end fossil fuel use within that timeframe.
Week ahead, we expect to see increases in gas and power prices as winter demand picks up. German and Nordic day-ahead power prices have already spiked, with the Nordic spike particularly harsh given the onset of snowy weather over the weekend.
