28 November 2018
- Our supply spread indicator (Russian imports vs. NW Europe) is declining from week 46 onwards. This, combined with a strong increase in LNG imports, depicts a very bearish scenario. Moreover, the rate of discharging is well below average for this time of the year, an indirect sign that demand is weak. Coupling with oil is currently very low.
- The short-lived cold spell that affected Europe is being replaced by warm weather conditions over western and parts of central Europe, leading to a decrease in our HDD index. Our climate spread forecast indicates a decline of the index (i.e. gas more profitable to burn relative to week 47).
- The macroeconomic outlook remains the same, and is still disappointing. The PMI (manufacturing) is now between 51 and 52. The latest data for Industrial production and business expectation shows a downward trend. The energy intensity index (indirect measure of natgas demand) will likely decline during the next 5 to 10 days.