5 June 2019
- Supply conditions are still characterized by an abundance of gas across the European continent. Storage injection rates have picked up once again after a period of quiescence. LNG imports are down ~30% since the peak observed later in Q1, but they are not expected to decline further. Our E/NW pipeline spread indicator has substantially declined on the back of a reduction of Russian gas.
- High pressure conditions will dominate over much of northern and central Europe for the next 5 to 10 days, with a tendency of an upstream extension over the UK. Surface temperatures will likely increase in the aforementioned areas, leading to an increase in CDDs. The gas/wind spread is also set to raise on the back of weaker winds. Our climate spread oscillator is predicted to move downward, contributing to a higher demand.
- Macroeconomic conditions continue to struggle, however the strong negative trend observed in the past 12-15 months seems to have stalled. The PMI has been slightly increasing month-on-month, although it remains below 50. Our BE oscillator has also shown a positive value after the drop observed in April. The industrial production (official figures, lagging indicator) still exhibits disappointing numbers.