Gas and Carbon Forward Contracts are on the Rise
The European power contracts for the year ahead were released on Friday. They reflect higher carbon permits as well as gas contracts. LSEG data show that the German 2025 baseload price rose by 1.7%, to 91.14 euros per megawatt-hour (MWh), at 1111 GMT. It had previously reached a high of 91.25 euro/MWh for two weeks. The equivalent French position increased 3.2% to 77.15 Euro/MWh. The European CO2 allowances expiring in December 2024 were up by 1.1% to 66.79 Euros per metric tonne.
Angola LNG is considering expansion as gas supply increases
Angola Liquefied Natural Gas is looking at future expansion options, including adding a three-million-metric ton mini train, as gas supplies ramp up in the plant over the next year. The plant will reach full capacity by 2025, thanks to extra supplies from Chevron and the New Gas Consortium. Africa's second largest crude producer is planning to shift more towards natural gases to capture the growing demand on key markets in Europe, Asia and Africa. Angola's LNG plant was built at a cost $12 billion more than 10 years ago.
German spot prices fall on the back of a wind forecast, while French prices increase on demand
On Thursday, the European spot electricity prices were mixed. Germany's fell on expectations of increased wind power generation, while French prices rose due to projected higher consumption. The LSEG report also identified the increased solar power and brown coal generation as factors affecting market. German baseload power fell 35.4% to 114.8 euros (123.50 dollars) per megawatt-hour (MWh) by 1035 GMT. This is down from the five-month-highs reached this week. The French equivalent contract increased by 4.3% to 109 euros/MWh. The French nuclear capacity remained at 79%.
Lagos, Nigeria seeks investors to build a 4,000-MW gas-fired electricity plant
Lagos, Nigeria's commercial hub, invited bids on Thursday for the construction of gas-fired power stations of up to 4,050 megawatts (MW) to fill a shortfall in the national grid. The city is hoping to put an end to years of blackouts which have affected businesses and homes. According to the World Bank, four out of ten Nigerians, Africa's largest nation, lack access to electricity. This is often cited by investors as a major obstacle to investing in Nigeria. Lagos State Government…
OPEC is optimistic about global oil demand and does not see a peak in sight
Haitham Al Ghais, secretary general of the Organization of Petroleum Exporting Countries in Abu Dhabi, said that oil demand is expected to be very high in the near and medium term. He said that while there are challenges, the overall picture is not as bad as it sounds. The so-called "peak demand" will not occur as long as the global economy grows. Ghais stated that the oil producing group was optimistic about the global economy. He noted growth in the U.S. as well as in China. He reiterated that he does not expect the demand to peak anytime soon.
Spot prices rise due to low renewables production and increasing demand
European spot electricity prices rose to multi-month highs Monday. Renewables are expected to continue to be low, while demand is projected to increase. By 0901 GMT, the German baseload contract for Tuesday had reached its highest level since June 25, at 145 Euros ($157.99 per megawatt-hour (MWh). On Friday, during the All Saints Holiday, no equivalent price was traded. LSEG data shows that the equivalent French contract is now at 117.50 Euro/MWh, after having reached a contract high of 117.50 Euros for 11 months.
Sources say that OPEC+ has agreed to delay the December production increase by one month.
Three sources within the producer group said on Sunday that OPEC+ had agreed to postpone by one month the planned increase in oil production for December, due to the weak demand, notably coming from China, and the rising supply from outside the group. The OPEC+, which consists of the Organization of Petroleum Exporting Countries, Russia, and other allies was supposed to increase output by 180,000 barleys per day in the month of December. The increase was already postponed from October due to falling prices.
TotalEnergies' third-quarter revenue drops as refining profits collapse
TotalEnergies, the French oil giant, reported a third-quarter net profit at $4.1 billion, a three-year-low. The company was hit by a collapse in refining margins as well as upstream outages. The adjusted net income fell 37% compared to a year ago and 12.7% compared to the $4.7 billion of the previous quarter. Analysts had expected $4.2 billion. The adjusted earnings before interest tax, depreciation, and amortization (EBITDA), which is the total of all these items, fell by 23.6% to $10 billion.
Eni, Italy's largest oil company, will increase buybacks after its quarterly earnings exceeded expectations
Eni, the Italian energy company, announced on Friday that it will increase its share-buyback program to 2 billion Euros ($2.2 billion) after reporting better-than expected third quarter results. The adjusted net profit for the third quarter of last year was 1,27 billion euros. This is higher than the consensus analyst forecasts, which were compiled by the firm. However, it is lower than the 1,82 billion euros recorded in the previous quarter. In July, the state-controlled…
Hydro stops funding and cuts stakes in Vianode, a battery materials manufacturer
Hydro, a Norwegian metals company, announced on Thursday that it would reduce its stake in Vianode, a graphite materials firm, and cease to provide funding for the group. It joins other Nordic companies who have scaled back their ambitions in battery manufacturing. Vianode was originally owned by metals group Hydro and Elkem, along with private equity firm Altor. In 2022, they announced plans to build an plant that would provide two million electric cars a year with anode graphite.
The price of wind power is rising
The European power price for Thursday dropped on the forecast of increased wind generation in the region and a fall in demand. LSEG data show that the price of German baseload electricity for Thursday fell 8.4%, to 103.25 Euros ($111.36 per megawatt-hour (MWh), by 0921 GMT Wednesday. The French power price for the day ahead fell by 25.3%, to 68 Euro/MWh. Analyst Francisco Gaspar Machado of LSEG said that residual load in Germany is expected to decline day by day, while French and German nuclear capacity will increase.
Naftogaz CEO: Ukraine produces 53 mcm gas per day
The CEO of Naftogaz said that Ukraine produces 53 million cubic meters of natural gas per day, including 43-44 Mcm produced by the state energy group. Oleksiy Cernyshov said Naftogaz had prepared for different scenarios in advance of the winter months, and that it ensured appropriate quantities of gas were stored. According to him, Ukraine currently has less than 13 billion cu m of natural gas in underground storage. He added that non-resident investors have about 0.5 bcm in underground storage.
Spot prices rise due to a projected drop in wind energy supply
The European spot power price continued to rise on Tuesday. Wind power is expected to continue to decrease in the region on Wednesday. LSEG data show that German baseload power for the day ahead rose by 39.8%, to 97.50 Euros ($108.23), per megawatt-hour (MWh), at 0818 GMT. The French contract, which is equivalent to the English contract, added 42.9% or 85 euros/MWh. According to LSEG analyst Naser Hachemi, an increase in Germany's residual load, mainly due to lower wind power production, makes Germany a daytime net importer.
Gazprom increases first-half gas production by 16%
Gazprom, the Russian gas company, announced on Monday that its output of natural gas increased by 16% in the first half of 2024 compared to the same period last year. This continued the recovery after the previous year's record-lows. Gazprom's oil arm Gazprom Neptune is included in the production figures. Gazprom has said that it has benefitted from increasing its share of Sakhalin Energy (which operates the Sakhalin-2 LNG development) to 77.5%, from just over 50%, after Shell left the project in 2020 after the beginning of the conflict in Ukraine.
Sources: TotalEnergies will sign a $10 billion deal for Suriname's offshore project
Four sources familiar with the project said that TotalEnergies, a French oil company, will sign the final investment decision on Tuesday, for the first offshore oil and natural gas development of Suriname. The development is expected to cost more than $10 billion. Gran Morgu, located in Block 58 140 km off of the coast of South America, has estimated recoverable reserves of 700 million barrels. This is comparable to ExxonMobil’s 11 billion barrel discovery in the neighbouring oil-rich Guyana.
The rising German wind power generation is a factor in spot prices
European prompt electricity prices fell on Friday, as a result of expectations that German wind energy supply will double on Saturday. Riccardo Paraviero, LSEG analyst, said: "The fundamental outlook (for Friday) is decisively negative. He added that wind power production could reach 25 gigawatts during certain periods. LSEG data revealed that the German baseload electricity contract for Friday had fallen 21.4% to 91 euros per Megawatt Hour (MWh) at 0925 GMT. The French equivalent contract fell 7.8% to 66 Euros/MWh.
Lower renewables output lifts spot prices
German renewable energy generation is expected to fall on Wednesday. Marcus Eriksson, LSEG analyst, says that residual load will increase in Germany Wednesday. Exports are expected to peak at mid-morning, and imports afterward. LSEG data show that German baseload day-ahead power jumped 48.3%, to 86 Euro per Megawatt Hour (MWh), by 0857 GMT. The French equivalent contract increased by 20.8%, to 50.75 Euros/MWh. The data revealed that the German wind power production is expected to drop by 5.3 gigawatts to 20.7 GW.
German wind power generation on the rise: Spot prices drop
German wind power is expected to double in supply on Tuesday, causing the European spot electricity prices to fall on Monday. German baseload electricity for Tuesday, at 0904 GMT was 58.45 Euros ($64.58 per megawatt-hour (MWh), down 50% from Friday's price for Monday's delivery. LSEG data revealed that the equivalent French contract was 37.65 Euros/MWh. On Friday, the Monday price was not traded. Marcus Eriksson, LSEG analyst, forecasts that residual load will fall in Germany Tuesday. Imports are forecast for the morning, and exports in the afternoon.
Sources say Egypt is seeking 20 LNG cargoes to meet winter demand, as the gas crisis worsens.
Three trading and industry sources confirmed on Friday that Egypt issued a tender for 20 cargoes (cartons) of liquefied gas to meet the demand for electricity during winter, despite a sharp decline in domestic production. It is the first time Egypt issued an tender to cover the winter demand since 2018. In order to be a reliable gas supplier to Europe, the most populous Arab nation has reversed its recent position of being an exporter by buying over 30 cargoes of natural gas to cover summer demand. The Egyptian General Petroleum Corporation's (EGPC) tender closes on September 12.
Prices of nuclear spot prices fall on increased availability
The European power price fell from its multi-month highs Tuesday, as French nuclear availability increased and residual load is expected to fall. Karsten Walke, ICIS analyst for power markets, says that in Central-Western Europe the risk of prices being higher than normal is still present, due to the stable forecasts on demand and the generally low expectations regarding wind. He added that the spikes in day-ahead prices, such as the one on Monday, are only temporary and will not become the norm.
