A revised weather forecast that forecasts a lower risk of frost, with an intensity of LNG availability and greater storage withdrawals, is likely to lower energy prices in the next week.
Oil markets were increased as part of the escalating tensions in the Middle East on 3 January due to fears about supply disruptions. It impacted gas and electricity prices in a knock-on way.
Friday, following news of the assassination of General Qasem Soleimani of the Islamic Revolutionary Guard Corps, prices of electricity and natural gas in Europe were lifted across the board.
At sessions at $68.72/bbl at 14:00 GMT, Brent futures gained $2.47/bbl for trade.
At 0,30 / MWh, 26 percent up on 13:30 GMT, the German Electricity Day-ahead was traded at € 38,50/ MWh, while Dutch TTF Day-ahead at 12:38 GMT was benchmarked at 12:30 / MWh on a day-to-day basis.
An overstretch of oil flow will result in price increases of raw materials and have an effect on gas and power products.
Major shipowners said that the situation was being controlled by ICIS (see separate story).
A sharp decline in Russian gas flows to Europe through Ukraine has intensified the bullish effect of Iranian instability on gas markets.
PLUNGING RUSSIAN TRANSIT
Transit volumes through Ukraine have decreased to 17 mcm/day on 1 January, from an average of 162 million cubic meters per day, and on 2 January, to 11 mcm/day.
The effects on Austria and Italy flows was a knock-on effect. For example, in the first three days of January, exports from Austria to Italy at the Tarvisio interconnector point fell from an average day to 69 mcm/day in December to 31,5 mcm/day.
In comparison with averages of exports to Deutschland in December, this led countries such as Austria to reverse flows in Germany and import 16mcm / day from the state in January.
On Thursday Sergiy Makogon, Chief Executive Officer of the new Uranian gas company TSO (GTSOU) indicated that applications and tariffs had been introduced.
On Friday, the Ukrainian TSO said it transited to Europe and neighboring Moldova at a rate of 35-45mc/day.
With 26 cargos unloading across European terminals, the impact of the rising price of oil and the reduction of Russian gas flows has been mitigated by the expected inflow of LNG. In December 2019 it is roughly 9 cargoes, but it is up from 20 in January 2019 on average.
In Asia, the Japanese Weather Agency forecasts a 40 percent chance of temperatures above average throughout the region.
The pull of LNG into the Asian Pacific will, therefore, be slowed as a result of weather-related demand, holding Europe as the major market offer for LNG generated at the Atlantic.