According to Cedigaz, the NBP spot price for Q1 2018 settled at $8 MBtu, a level that is relatively high compared to the same period last year ($6/MBtu). The NBP price and the LNG spot price in Japan are trending in parallel, with the former presenting a discount of between $0.6 and 1.3/MBtu NBP, depending on the level of demand on the Asian market.
As for forward prices, the current tendency also parallels the LNG spot market in Japan. Prices of $7/MBtu – $1.5/MBtu higher than last year – are forecast for Q2 and Q3. Next winter’s prices ($7.7 to 8/MBtu) are in line with last winter’s.
For spring and summer, the increase compared to 2017 may be attributed to the trend in the CO2 EUTS price (See Figure). Rising from €5 to 13/tCO2, the cost of coal-fired electricity has increased by about €7/MWh at a time of relative stability in coal prices.
This has led to a higher reference price for gas. The LNG spot prices in Asia evolve in line with this reference price, with deviations dictated by the supply/demand balance.
Conversely, in winter, the reference becomes the price of Asian oil-indexed contracts and the NBP aligns itself with the Asian LNG spot price with a discount depending on the level of demand.
European Gas Hub is an online platform for sharing analysis and information about European natural gas markets more info
Sign up to receive our weekly newsletter with new European gas market reports, presentations & analysis. Every Tuesday.
By signing up, I agree to our TOS and Privacy Policy.
© 2020 EuropeanGasHub | All Rights Reserved
SIGN UP to receive our weekly newsletter with new European gas market reports, presentations & analysis. EVERY TUESDAY!
