State of the Energy Market – 20th July 2022

Daily Updates

Comments made by President Putin during a working visit to Tehran have caused wholesale prompt energy prices to increase. Mr Putin spoke about the gas compressor which was held up following repairs in Canada and indicated that the appropriate paperwork had not been received by Gazprom to enable the compressor to be returned and made operational. He also indicated that one of the other 6 compressors (5 active and 1 reserve) on the Nord Stream 1 pipeline would now also be in need of repair. He went on to remind the EU that Nord Stream 2 was sitting there idle and ready for transporting gas to Europe as an alternative to Nord Stream 1. These comments, implied that Nord Stream 1 may not be returning on 21st July as originally planned, following the period of planned maintenance. However, there were indicators from other sources that Nord Stream 1 was being prepared for operational use as planned on 21st July and so perhaps the comments from Mr Putin
were simply brinkmanship.

Mr Putin’s comments were received negatively by the prompt market traders, and we saw wholesale gas prices for August 22 increase by as high as 33% at one stage before prices fell slightly. We expect August 22 to settle with an approximate 25% increase on yesterday’s close. Interestingly enough, Winter 22 gas although still up, traded within a range of 1% to 4% up on yesterday’s close, and we expect it to close approximately 3% up for today. Power prompt and curve prices have generally
been shifting upwards as well but by reduced levels compared to gas.


August 22 wholesale power prices increased by 6.9% to close at £241.66 per MWh.


August 22 wholesale gas prices increased by 11.8% to close at £1216.53 per therm.

In other energy related news:

  • Gazprom PJSC is prepared to resume gas exports through its Nord Stream pipeline to Europe on Thursday, however this will be at a reduced capacity following the Russian gas giant’s announcement of a force majeure for some of its European clients. Although he predicted that flows would resume, President Vladimir Putin cautioned that if the return of a turbine which was delayed due to sanctions is not sent on time, volumes may be reduced to barely 20% of capacity by the end of this month when another unit is scheduled for maintenance. The dispute regarding the turbine appears to be nearing an end, but Europe, which depends on Russian gas, is still waiting anxiously to see if flows restart on Thursday. According to one of the persons acquainted with the situation, rising gas prices have helped Gazprom to reach its full-year objective for export profits from important markets in just five months. 

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