London — Natural gas spot delivery on both the Dutch TTF and UK NBP natural gas hubs was on course to come in below Summer 2018 as pricing has been under pressure from a range of bearish fundamentals, S&P Global Platts data showed.
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Based on Thursday's price assessments, TTF spot delivery has averaged Eur23.356/MWh so far during the Winter 2018/19 delivery period, and was on course to average Eur22.007/MWh based on the weekend, balance-of-month and March assessments, which were assessed at Eur17.60/MWh and a Eur17.775/MWh parity, respectively, on Thursday.
As a result, TTF spot delivery was on course to stand some 19% shy of the Winter 2018/19 contract's expiry of Eur27.275/MWh and down 6% on the contract's Eur23.391/MWh average during its time as the front-season.
A similar trend was also seen on the UK's NBP hub, where Winter 2018/19 delivery was expected to come in at an average of 58.321 pence/therm against the Summer 2018 spot delivery average of 58.937 p/th.
The NBP Winter 2018/19 contract expired at 76.30 p/th at the end of September and averaged 65.254 p/th during Summer 2018, both comfortably higher than the expected spot average during delivery.
This winter's spot pricing trends are vastly different to those in both previous seasons, which saw market participants go long ahead of Winter 2018/19 on the back of previous price trends.
Indeed, TTF Winter 2017/18 spot delivery was 14% higher than the seasonal contract's expiry with Summer 2018 spot delivery up a more pronounced 25%.
On the NBP hub, spot delivery for Winter 2017/18 and Summer 2018 came in 11% and 27% higher respectively, Platts pricing data showed.
With this winter-delivery period expected to come in well below where the equivalent seasonal contracts expired, snapping the recent trend, market participants may be more inclined to take more risk ahead of the next seasonal delivery periods, which have been highlighted recently by the steep falls seen on both hubs.
The TTF Summer 2019 contract was assessed at Eur17.825/MWh Thursday from an assessment of Eur24.75/MWh on October 1, a fall in value of some 28% so far this winter, with the NBP equivalent having lost 29% over the same time frame.
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