Commodity market report
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9 Pages

Europe gas and power markets short-term outlook Q1 2017


Europe gas and power markets short-term outlook Q1 2017

Report summary

In 2017 LNG imports will increase over 50% on 2016 levels. However, declining indigenous production will largely counter this growth and sustain Europe's requirement for Russian gas imports. Our gas price forecast averages US$5.8/mmbtu, close to an oil-indexed proxy. The outlook changes in 2018, as gas prices are set to fall, with a price floor being set by the cash cost of US LNG imports.

In power, the relief from supply constraints – raised in the latter part of 2016 by French nuclear outages – reducing coal prices and renewable production will see German base load power prices average €36.8/MWh in 2017. Although this price is above 2016 levels, spreads available to coal and gas generators will be less attractive this year. Gas into power will be more attractive in the UK, where we expect base load power prices to average £45.4/MWh (€53.1/MWh) in 2017.

This report includes an outlook for European gas balances and forecast North West European gas and power prices out to Q4 2018.

What's included?

This report includes 2 file(s)

  • Europe gas and power markets short-term outlook Q1 2017 PDF - 337.47 KB 9 Pages, 1 Tables, 8 Figures
  • European gas and power short term price outlook Q1 2017.xls XLS - 448.00 KB

Description

Volatility in oil markets and the growth of unconventional gas supply have created a high degree of uncertainty about future gas demand and the direction of gas prices.

This Gas Markets Short Term Outlook report forecasts future pricing, based on deep analysis of gas supply and demand fundamentals. Additionally, it addresses complex questions on gas flows, identifies future opportunities and informs fuel purchasing strategies.

Participants and investors can use this short term outlook report to understand gas markets and assess the impact of global gas dynamics and key market drivers.

Wood Mackenzie provides detailed supply, demand and price forecasts based on our integrated upstream, power, coal and LNG research. Our regional gas experts are based in the markets they analyse, providing comprehensive analyses of regional and global gas markets.

If you want to understand complex gas market dynamics and plan for the future, Wood Mackenzie is the premier resource to help you gain a clear, competitive advantage.

  • Executive summary
    • Gas highlights
    • Power highlights
  • Supply-demand balances
    • Introduction
      • European gas fundamentals
      • Gas demand
      • Gas supply
  • Prices
    • European gas prices (NBP and TTF)
    • European power prices
      • Prices and spreads lower as supply-side concerns recede

In this report there are 9 tables or charts, including:

  • Executive summary
  • Supply-demand balances
    • Key markets data
    • Storage inventories*
    • Russian gas imports
  • Prices
    • Gas Prices
    • Economics of US LNG to Europe
    • European base load power prices
    • UK base load prices - year-on-year comparison
    • Clean spreads (base load) - UK
    • Clean spreads (base load) - Germany
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