Despite last week’s bearish moves, the market is turning higher again this week with the focus on the upcoming Norwegian maintenance and the pace of storage injections.
The Kollsnes and Troll fields are scheduled for another round of outages starting tomorrow and lasting for almost two weeks. These works are expected to curb flows from the Norwegian Continental Shelf to the UK and Europe. However, there are bearish factors which may limit the upside; LNG flows remain stable, wind generation whilst below norms is still steady and temperatures are expected to improve towards the end of the month.
EU storage levels are approaching 50% fullness however the pace in the second half of May have slowed down as limiting Norwegian gas deliveries and planned maintenance at France’s Montoir and Belgium’s Zeebrugge LNG terminals tightened supply. The current injection trend appears to be following the 2022 profile. With further, and much larger, Norwegian outages planned in September the current injection rate is important to maintain to ensure enough gas is in store.
Further, ongoing escalations between Russia and Ukraine also supported prices earlier this week after Ukraine launched a large-scale drone attack on air bases deep in Russia. The market feared the possibility of a ceasefire and potential peace deal would move further away. The talks in Turkey earlier this week also saw no further breakthrough.
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