GAS

• Prior to 12th Dec ’23, one has to go all the way back to early 2021 to find a day when Summer-24 was cheaper than Summer-25/Summer-26 delivery (see chart) –  evidence, surely, that markets have priced-in significantly diminished risk for the mid-term (versus increased risk thereafter).
• Prices were a little firm at this morning’s open off the back of a short UK system (demand outstripping supply) – though, at the time of writing, prices all the way down the curve have drifted back below Friday’s close.
• In short, we’re in a tight trading range with key drivers well-balanced i.e., European storage is high (69% versus 5-year average of 58%)  but Norwegian flows are weakened by unscheduled outage; underlying confidence persists that we’ll finish Winter-23 with more than 50% storage left in the tank but geopolitical tensions persist in Russia and across the Middle East.
• Demand is below seasonal norms today against a bearish backdrop of 51% renewables output (48.5% wind) and only 10% gas-for-power burn.
• Things are heating up between the US and Iran with three US soldiers killed and about 40 others injured in a drone attack by Iran-linked groups on the military base known as Tower 22 near the Jordan-Syria border on Sunday.
• We’re told to expect “waves” of US retaliation…
• Monthly Day-Ahead averages are on target this month (so far) to achieve 70p/therm (or circa. 2.4p/kwh).