A "frosty" winter for gas prices?

European gas storage levels are lower compared to the same time last year, but many market participants are fairly confident that there will be enough of the fossil fuel for the months ahead. However, the weather remains the uncertain factor with some experts estimating that gas prices could jump more than 30% if Europe is hit with very cold temperatures this winter.

What’s the outlook for prices as demand remains low, Europe becomes increasingly reliant on US LNG amid an unstable geopolitical situation?

In this episode, Richard sits down with the London Stock Exchange Group to discuss several potential seasonal scenarios and the key market drivers for the months ahead. 

Host: Richard Sverrisson - Editor-in-Chief, Montel News
Contributor: Laurence Walker - Deputy Editor-in-Chief, Montel News

Guest: Wayne Bryan - Research Principal, London Stock Exchange Group

Editor: Bled Maliqi
Producer: Sarah Knowles

Transcript

Richard Sverrisson - Editor-in-Chief, Montel News: 0:05

Hello listeners and welcome to Plugged In - The Energy News podcast from Montel, where we bring in the latest news issues and changes happening in the energy sector. Winter is coming and if it's cold, we've got a problem. That's the message from Gas Traders this week, a week where the EU said it would ban Russian LNG imports from the 1st of January, 2027. With European storage levels notably lower than a year ago, experts are predicting that gas prices could jump more than 30% if Europe is hit with very cold temperatures this winter. The previous three years have seen relatively mild winters, but is Europe prepared for a season of cold snaps in this episode. I'll be speaking to Research Principal Wayne Bryan at the London Stock Exchange Group. But first, I'm joined by Montel's, deputy Editor-in-Chief, Laurence Walker. Welcome back to the podcast, Laurie.

Laurence Walker - Deputy Editor-in-Chief, Montel News: 0:58

Hello, Richard.

Richard Sverrisson - Editor-in-Chief, Montel News: 0:59

So, so let's start with storage levels., Why are they so low in Europe this year compared to last?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 1:07

Certainly the we the EU has relaxed its targets this year. So whereas last year you had to reach the 90% by winter this year, they've relaxed that. So you only have to reach that 90% target between 1st of October and the 1st of December. So there isn't that kind of rush to get gas into storage like we had last year. And people can do it at their own pace. So it's not necessarily a sign of a shortage as such. It's just, you know, a different way of building up the stocks.

Richard Sverrisson - Editor-in-Chief, Montel News: 1:38

I think that's a very important observation there. You know, it's not it's not no panic stations here whatsoever. I think that's important to, to reassure people with that. But what in more general terms, Laurie, what are the expectations for the coming winter in, in terms of supply and demand?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 1:52

Well, certainly, I think from now the market's looking pretty relaxed, pretty comfortable. Certainly we have plenty of LNG coming in. We have plenty of gas coming from Norway. And in terms of demand, it's not as strong as it could be. We haven't had really, seriously cold weather yet. The projections are not terribly cold for the time being. There's perhaps some cold snaps on the horizon, but no, no prolonged periods of cold weather, which would really drive up demand and cause problems. As things are looking now, I'd say they're looking pretty comfortable.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:24

And how how is the market actually priced in the coming winter then?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 2:28

I mean, if you look at prices that on the curve, it's very, very flat. We're talking, you know, 32 euros, a megawatt hour pretty much each month into well into April. You could say people are poised waiting for something to happen possibly, and they will react and you may see more. You know, you could see price spikes, obviously as you could at any, any winter. But certainly at this stage things are looking fairly positive from a supply viewpoint. I don't think people are too concerned at least.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:54

Thanks very much, Laurie. So what a gas traders gonna have to contend with over the coming months. I'm pleased to be joined by Wayne Bryan, research principal at the London Stock Exchange Group. Welcome back to the Plugin podcast, Wayne.

Wayne Bryan - Research Principal, London Stock Exchange Group: 3:07

I know good afternoon. It's been a while. Nice to see you all.

Richard Sverrisson - Editor-in-Chief, Montel News: 3:10

Yeah, great to be, it's great to have you back, Wayne. Now let, I just wanna start with the sort of news. Brussels, I dunno what's more surprising? The fact that the EU banned Russian LNG imports from the 1st of January 2027, a year earlier than previous planned, or that way that, or that Europe is still sourcing about 15% of its gas from Russia. What do you think, Wayne? What? What's the impact of the ban on Russian LNG from the 1st of January, 2027?

Wayne Bryan - Research Principal, London Stock Exchange Group: 3:34

Well, I think the, firstly the ban has to happen. I think if we take everything into consideration, I believe this ban is something that needs to happen for, for many reasons that we all know. The only problem with this ban is again, the over reliance now on another source of supply, which is America. So that's also you sort of jumping out of bed, out of bed with Russia and sort of into. With the US not that it's got the same sort of geopolitical risks as we've seen from Russia over recent years. So I think the ban, and again, this has come from a lot of pressure, not only from America I think Donald Trump put a lot of pressure on on the EU as well as it comes from internally. We see all the sort of noise in the news around Europe. We've seen what's happening in Ukraine at the moment. A lot of the attacks are really targeting the sort of energy infrastructure and ahead of the sort of heating season. So I think the ban it has to happen, really? And the second part of your question was

Richard Sverrisson - Editor-in-Chief, Montel News: 4:21

What do you think the impact will be?

Wayne Bryan - Research Principal, London Stock Exchange Group: 4:24

Well, you can look at the curve. The curve doesn't see it as a huge impact. I think what will happen is of course we've got a lot of alternative supply sources coming online, LNG wise, and I think if you look at over the next, by the end of the decade, I think US LNG export capacity doubles. So again, I think for me, the main thing is we're just moving from over reliance on one supplier to another, like the pipe gas situation. But due to the current sort of global market and sort of not only from a supply demand sort of gas fundamental perspective, but also from sort of economic perspective, I think the sort of risks of like, you know, people talk about shortages, et cetera, are quite minimal. And I think as always, the European gas market always adjust and finds what it needs, whether that comes through price or demand side reductions, we will get there. So I think overall, A, it's a good thing and B, I think we're in a much better position to cope than we were say a couple of years ago when the sudden Halt in Russian gas pipeline imports obviously saw, you know, prices hit the sort of the heady days of 330 euros per megawatt.

Richard Sverrisson - Editor-in-Chief, Montel News: 5:25

Absolutely. Yeah. Let's, move on to prices. Yeah. What, where have they been in the past few months and what have been the main drivers?

Wayne Bryan - Research Principal, London Stock Exchange Group: 5:32

Pretty range bound, to be honest. We've had a few small spikes, but if you look at the sort of summer, you saw a lot of the geopolitical instability in June. You know, Iran, Israel, Russia, Ukraine, Qatari issues. And then since then, sort of July, August, September. Couple of the odd little spikes here and there, but mostly pretty range band. In fact, I was looking at the TTF and day ahead in front month of the last couple of days. And if you just take it back a month, I think the, the day ahead is trading in sort of less than three or a range. And the month ahead, even tighter to about two, two and a half. So that goes to show you the where the market is. And we're actually below where we were last year in some instance. We've been 30% lower than last year, despite entering the start of the season with obviously less storages. And again, that kind of shows you the sort of confidence in the market. However, a lot of risk still remains and I think some of the drivers we've seen recently, again, low renewable generation, but if you look at renewable generation for the week, coming super strong, the UK here today, as is very windy. And that's expects to continue. So a little bit of, a bit of upside from that. We've had a few maintenances in Germany that's impacted LNG send out. Norwegian maintenance has been a little bit stronger than we expected. So there's been a few little things, but nothing really to sort of send the market into sort of panic or overdrive, shall we say. And if we look forward, I think for us, looking over the sort of next week and into next month. We're releasing one of our monthly reports today. We expect prices to slight increase based on current prices today, but nothing too bullish based on the sort of supply demand factors, and it looks like we'll be returning more to withdrawals next, next month as well. Still quite a lot of uncertainty over weather. Some of the longer range forecasts. Some people haven't got much confidence in them. Some of the signals point to quite mild. If you look at the C 46 at the moment, it's pretty nice until December. But again, then we get this period of uncertainty, December, Jan Feb, where at the moment we're still not sure where that sort of residential or heating demand will be.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:33

Sure. Well, I mean for those listeners who may not be following the gas market on the day to day, or there's much kind of focus on detail as you do. But where are we? What are the current prices and where do you expect them to be in the coming months? If you say so, so say the TTF through the Dutch at the Dutch hub.

Wayne Bryan - Research Principal, London Stock Exchange Group: 7:49

Well, TTF day ahead, if you look now, is trading around the sort of 31, 32 mark. I think it's 32 today. We see that maybe slightly higher next month, but nothing more than 33 based on looking at the fundamental analysis that we've done looking forward for the next month.

Richard Sverrisson - Editor-in-Chief, Montel News: 8:05

And you said you, we just for those listeners out that the, we are recording this on Thursday afternoon. Correct. So that's where the reports comes out from Lseg. No. Is the market. So it appears to me that the market is pretty

Wayne Bryan - Research Principal, London Stock Exchange Group: 8:16

relaxed,

Richard Sverrisson - Editor-in-Chief, Montel News: 8:16

relaxed. It's not pricing in a cold winter, it's

Wayne Bryan - Research Principal, London Stock Exchange Group: 8:19

no, but that we know that can shift pretty quickly and I think the market now is in sort of waiting sea mode. You've seen this indicative of this sort of range bound situation we're seeing. We're waiting for the next surprise really. As we always speak about, there's always something around the corner, whether it's from a supply supply perspective or a demand side, or a geopolitical side with the trade wars, tariffs, et cetera. You know, Trump, China, I mean, there's quite, quite a lot going on at the moment in terms of geopolitics, but at the moment, not much of that is filtering into the gas market, but it can, it can do.

Richard Sverrisson - Editor-in-Chief, Montel News: 8:53

But in generally, in terms of supply. Are we safe? Are we out the woods? Is there is it maybe a little bit dangerous to say where there's an abundance of supply, but certainly less nervousness in the market than there was say, a year or two ago?

Wayne Bryan - Research Principal, London Stock Exchange Group: 9:06

Yeah, a lot. A lot less nervous. Of course, things can happen and prices can spike, but as I mentioned at the earlier, if we look at where we are this year compared to last year, some 30% different difference in prices depending on what exact day. But we've seen that fluctuation compared to last year, throughout October. So for me, that goes to show the market is in a better place. There's several reasons for that. Of course, LNG import capacity is massively grown in the past 12 months, we've seen more renewables. And French nuclear is super high at the moment. I think it's forecast over 50 sort of next month. So there's a combination of factors. And last year we were quite concerned about the loss of Russian transit from January the first. This year we know that's not gonna happen. So we already know what to expect in that respect as well. So like I said, there's definitely still risk, but if you look at the winter now and sort of zoom out for the whole winter, I think we look at, we revised our end of season storage for Northwest Europe. This is, and looking at our scenarios, even in our cold scenario where stocks get severely depleted. Looking at what's available next summer, we can quite easily replenish storages to the 90% level by September. I think in our sort of mild scenario, then we could fill the storages a lot earlier, a lot earlier. So overall for us now, the market looks, you know. It, it looks how it's pricing at the moment and how it's sort of moving is pr pretty flat and just, we're just waiting really for, for something sort to happen and again, our storage is, we still see comfortable, comfortable situation. If supply and. Where we expect it. Demand is where we expect, and even I said even in the three different scenarios, we still manage to, to fill these storages. And we see it now about 74% by the end of November. And again, we're gonna fall short of the 90% for total eu, but we have it at 74%. And last year it was 85%. It's only 11. Percentage point difference.

Richard Sverrisson - Editor-in-Chief, Montel News: 10:59

But of course, no one wants something major to happen to to break us out of this range, in a sense. Wayne, so yeah, of course. Fingers crossed. But in, you know, let's talk about on the demand side where, what's happening in Asia, for example is Chinese gas use slowing? What's happening in Northeast in parts of the Asian continent?

Wayne Bryan - Research Principal, London Stock Exchange Group: 11:15

Well, China's got a several situations actually in China. I think one of the first thing we've seen in China is the gas use is slowing. You've got LNG truck prices are lower, which obviously impacts also as well. Higher global prices mean you favor the local market. Gas production is rising. Gas imports via the power Siberia, or up to 31 BCM renewables have grown. And of course, don't forget they're still taking LNG from sanctioned places as well. That's another story. But overall, I think if you look at China, yeah, we see perhaps this year a slight increase in Chinese demand, maybe four or 5%. Some of that is linked to some potential industrial rebounds as well. So China, again, it's always, it's a market we have to monitor for this winter, and that'll continue to be the case. But so far, yeah, a few percent upside compared to last year.

Richard Sverrisson - Editor-in-Chief, Montel News: 12:09

And obviously, you know, if there were to be, you know, escalation in the trade war and the tariff situation, then that could have big impact here, right?

Wayne Bryan - Research Principal, London Stock Exchange Group: 12:17

Correct. And again, tariffs remain a sort of, tariffs are a concern. Not only for China, but for the rest of us. If you, for example, if you look and if you, you saw German industrial production plunge to 2005 levels. If you discount COVID-19 low and the global financial crisis in 2008, German industrial production is now at 2005 levels. Some of that was bought on by a big drop in car production, which really slumped. And again, that was, again, some of it was, some of the data was slightly skewed by closures 'cause of holidays of the car plants. But if you look at the car industry and the industrial sector as a whole it's really struggling. We've seen, and again, it's another example of tariffs. The import duties on cars have impacted German exports to the US market. And China used to take a lot of German, not only cars, but goods in general. That market has also suffered. And of course, higher tariffs on China have seen China flood Europe with some of their goods. That would typically have gone the other way. So more competition there. So if you look at that side of demand. It's not looking great on industrial basis. And chemical production of course is utilization has fallen. We're seeing rise in contracts being signed for imported ammonia, which again is another Sort of structural change in the sort of gas market on an industrial basis. Looking at residential, we've seen the last six months rolling average of demand destruction. Larger than the EU mandated. Remember the 15% they came out? If you look at the, look at North Europe, it's about 19% demand, destruction rolling, six month average. So that goes to show on the residential side, a lot of that is permanent. Again, energy save initiatives, I've highlighted before that people change their attitudes to heat in their homes, et cetera. If you look at Germany for October so far, it's 20% in terms of what we'd expect in terms of demand on these current temperatures. So

Richard Sverrisson - Editor-in-Chief, Montel News: 14:01

it's 20% down

Wayne Bryan - Research Principal, London Stock Exchange Group: 14:02

or? Yeah, what we'd expect. So demand, destruction. Northeast Europe as a whole, is 19 Germany isolated about 20.

Richard Sverrisson - Editor-in-Chief, Montel News: 14:07

In residential or

Wayne Bryan - Research Principal, London Stock Exchange Group: 14:08

residential

Richard Sverrisson - Editor-in-Chief, Montel News: 14:09

reside. This is residential.

Wayne Bryan - Research Principal, London Stock Exchange Group: 14:10

Yeah. LDS had demand. Destruction, I'm talking about. So purely for the domestic heating. That's

Richard Sverrisson - Editor-in-Chief, Montel News: 14:15

very, very interesting.

Wayne Bryan - Research Principal, London Stock Exchange Group: 14:15

So demand isn't doing great, to be honest. No industrial demand in general. France is, you know, the, the big powerhouses are struggling. I think Netherlands is the one with the bright spark at the moment, but yeah.

Richard Sverrisson - Editor-in-Chief, Montel News: 14:24

Are there any industries where there is an upturn or there is a bright spot anywhere? Or is it all pretty much slumping?

Wayne Bryan - Research Principal, London Stock Exchange Group: 14:30

There's a little bit of bright spot in sort of manufacturing, but again, if you look at all the metrics, we're still not in expansion territory in Germany yet. And of course, if you look at the German market itself, look at the GDP forecast, they're quite weak over the next three years and they're hoping, if you read what I think one of the German finance minister is they're hoping a lot of this uptick in demand comes from the domestic market. And a lot of it's due to stimulus. Obviously government stimulus. So again, uncertain. Not just again for Germany, but if you look at across the northwest Europe, there's not many economies. Maybe Spain's doing Okay. And the Netherlands as I mentioned, but again, not great. And of course renewables, we've seen stronger capacity increase. I think Germany's got extra 60 of solar. This winter, you know, so we've seen, we're expecting a bit lower gas for power this winter because last year we had that big Dunkenflaute episode, which really sort of, not only does it emphasize intermittency and renewables, but also gas. We need gas. We still need gas. Gas is base load gas will, gas is still needed In times of these intermittency, despite how much renewables we, we pile onto the grid. You saw that in Spain this summer. And then Spanish gas for power demand rocketed. And again, that, that's sort of an alarm. Alarm bell started ringing. I was in Madrid last week talking to some people about that. And yeah, again, gas, they're building some new plants

Richard Sverrisson - Editor-in-Chief, Montel News: 15:48

and, and so is Germany as well? Exactly. Germanys got massive, massive. What does it tell? Yeah, yeah, yeah. It's, it's, you're

Wayne Bryan - Research Principal, London Stock Exchange Group: 15:52

in the gas business. Yeah, it's not as though doom and gloom as some may have you say. And so, yeah, I think gas still has a bright future. And look at all the fis and all the projects coming online now. There's a lot of talk. If the, if it falls to $6, what's gonna happen and is it gonna be oversupplied? But we need to get there first, I think.

Richard Sverrisson - Editor-in-Chief, Montel News: 16:09

But have, has Europe built to many floating LNG terminals or, you know what's that? Is that, does that 'cause that's, is there now in terms of the supply coming in? Are these, all these terminals gonna be used or is that, what's the situation? Wayne?

Wayne Bryan - Research Principal, London Stock Exchange Group: 16:24

Well, if you look at the moment, I think the actual capacity is double what, we're double the imports. So we've built, I think 12 terminals, six or so projects. And don't forget, Germany's really, really done well. Germany's got four on the go now, so FSI. So there, they really The floating the floating

Richard Sverrisson - Editor-in-Chief, Montel News: 16:40

units.

Wayne Bryan - Research Principal, London Stock Exchange Group: 16:41

Exactly. So yeah, they really, really, really ramped up. So, but again, this is the risk so far this year, around 55. 58% of imports of LNG have come from the US. And that's only gonna increase. And it's a, you know, it's only gonna increase and we're about 60% year on year. So

Richard Sverrisson - Editor-in-Chief, Montel News: 16:56

do you think that's a worrying trend there, that you mentioned that at the start, that we're swapping reliance on one country for, for, you know, hopping outta bed with one and into bed with another. Is this, is this a, is this a concern, do you think? Or is this

Wayne Bryan - Research Principal, London Stock Exchange Group: 17:09

It does, yeah. It, it, it concerns me a little, not because. From a reliability aspect, but from a sort of regulatory and tariff wars. And we've seen, you know, we've spoke about Donald Trump several times, you and I over the years. And what we've seen playing out so far is exactly what we expected. You know, just state random statements, random tariffs. Chicken getting out tacos, some people call him. Roll him back one day, re-implementing the next day. One day it's, he's good friends with President Xi. The next day he's slapping tariffs on them. Then you've got the India situation. So that's a lot. The rare earth thing for me could really escalate tensions. Trump's very keen on these rare earths and China now looking to put sort of almost export duty, so you can't really sell it on. Which is also, so for me that's the only concern. Is a breakdown in relations over one could lead to. You know, a ramp up in, in tariffs on another. But I think the US are aware, of course they can sell their LNG, but they do need Europe and they would rather that Europe spend their money with them than on the Russian LNG, which again was what we were talking about earlier. But for me, yeah, it does raise some concerns, but overall, the relationship is, is quite good, but it, it does, you put your eggs in one basket like that with Mr. Trump, he sort of wouldn't say, got you over a barrel, but he may use that. I've seen that sort of tactic in across his sort of diplomatic or sort of, you know, his meetings, et cetera, or his statements where, yeah, he likes to have the upper hand and then. Then he could ride rough shot if he wishes. Yeah, that it is definitely a risk, but I think overall it's good for the security of supply and I think that's something that recently, if you look at the sort of energy transition trimmer sustainability, security spot. Affordability and security supply now seem to be well ahead of sustainability in terms of the merit order. And that was something again, I was talking about last week in Spain and a lot of people have that opinion now that it's taken a back seat. Let's just get affordability, let's just get security supply, sustainability concerns. Still there valid concerns, but we need to make sure, yeah, first and foremost we satisfy.

Richard Sverrisson - Editor-in-Chief, Montel News: 19:10

I mean, that's the kind of general trend, isn't it? I think in a lot of kind of, you're seeing it in annual reports from companies, from, the ESG, the sustainability and governance is falling away a bit, yeah. And the focus is very much on, on other aspects. Yeah, exactly. Affordability, the profitability, affordability, exactly. And even, back to fossil fuels. But Wayne, do you think, the US is also becoming more aggressive in marketing. Its LNG.

Wayne Bryan - Research Principal, London Stock Exchange Group: 19:33

Yes, it seems to be the case. A lot of new FIDs and also just putting demands on other countries about where they should be buying their gas from. Tells you as well that yeah they're quite aggressive. And again, all these new additions, new capacity additions, new plants, new trains. Or feed into Donald Trump's, freedom gas. He wants us to be the biggest exporter of everything if you listen to his communication. So, yeah, it's, it's quite an aggressive strategy. But it's based on continents that need gas. So why not be aggressive if you've got the, if you've got the volumes and the, and you've got obviously got the cheap domestic market. Massive discount to the rest of Europe at the moment. That may change over the coming years as all the new waves of supply come online. Yeah.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:15

And where, which European countries are gonna be most reliant on LNG imports whereas the biggest reliance we saw, the countries that were most reliant on piped gas. But where's the import dependency. Where's that? At its highest.

Wayne Bryan - Research Principal, London Stock Exchange Group: 20:28

Sorry. As in

Richard Sverrisson - Editor-in-Chief, Montel News: 20:29

What which countries

Wayne Bryan - Research Principal, London Stock Exchange Group: 20:30

are we know France, Belgium, have imported large amounts

Richard Sverrisson - Editor-in-Chief, Montel News: 20:35

of Russian gas. Of Russian LNG,

Wayne Bryan - Research Principal, London Stock Exchange Group: 20:37

sorry, LNG. Yeah. Yeah. Well, Yeah, generally.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:38

Yeah. Yeah. Yeah.

Wayne Bryan - Research Principal, London Stock Exchange Group: 20:39

So from that side, there's definitely some more demand there. But if you look at the rest of Europe, then most of it, like you said, Qatar, US, these are the main suppliers to our, to Europe. I think the countries that are overexposed to Russia and gas will have alternatives. But now you've got the situation with Japan, which they're being urged. Sort of, uh, scale back on Russian LNG, but they've got quite a lot of long term contracts.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:07

But I wasn't just thinking Russian LNG more LNG in general, Wayne, so from Qatari, from the US it is France, Belgium, Spain, well, Northwest Europe.

Wayne Bryan - Research Principal, London Stock Exchange Group: 21:15

Northwest Europe as well. Northwest Europe as a whole.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:17

Yeah.

Wayne Bryan - Research Principal, London Stock Exchange Group: 21:17

We need that LNG not only for supply, but also, you know, we need to refill these storages. And again, that loss of that flexibility from Russia Means that we're gonna continue across north ship to need these. And then now maybe even Ukraine might need some additional volumes now based on what's been happening there.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:34

That's leads me onto my next question, Wayne. Yeah. So we've seen Russia continue to target Ukraine's energy infrastructure this month and predictions that Ukraine will be relying on Europe for 25% more gas this winter.

Wayne Bryan - Research Principal, London Stock Exchange Group: 21:47

Yeah.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:47

What impact will that have or how do you see that playing out and what kind of impact could it have on Europe more widely?

Wayne Bryan - Research Principal, London Stock Exchange Group: 21:54

Well, yeah, they've said they wanna purchase, I think it's up to, yeah, 2 billion or 30% increase compared to last winter. But if you're looking at the current prices, you know, around the 2 billion, you're looking around. Four and a half to five BCM. Now that would help and that would be closer to the flips and increase they need. So that would help. And of course what would happen then is sort of, you need to get them flows into Ukraine and currently they're coming via Poland, Slovakia, and Hungary, around 250 gigawatt hours per day. If. This does transpire this additional per, I think Norway as well today, chipped in 140 or so million towards that fund, which is nice. So I think what you would need then that increase, we mentioned 30% is what they're talking about. That would take it to about 325 gigawatt hours, which if you push that all the way through to the end of March from, say the start of November. That would bring you up nicely to that sort of level. So what it would do is just, yeah, reroute some of the flows and might add a little bit, but not a massive amount of upside pressure. You've seen The market hasn't really reacted, even when it was announced. The market doesn't, hasn't really reacted that much to that news. Just a slight little reconfiguration of some of the flows. But we don't see it as a bullish factor unless that I import, unless that number changes, of course, which we all know again, that. Obviously not the possibility. And again, they need to get it into the country and there's not that many roots

Richard Sverrisson - Editor-in-Chief, Montel News: 23:16

of course. And the, there's, to toing and froing about peace deals, et cetera. Yeah. And do you think that could, is that likely to happen before, before Christmas? Or, and what kind of impact could that have here that could throw another new spanner into the works, couldn't it?

Wayne Bryan - Research Principal, London Stock Exchange Group: 23:31

I certainly, looking at the recent meetings, communications. I think they canceled this meeting now in, in Budapest.

Richard Sverrisson - Editor-in-Chief, Montel News: 23:39

Trump and

Wayne Bryan - Research Principal, London Stock Exchange Group: 23:40

Putin. Yeah, Trump and Putin. Sorry. Yeah. That it's meant to be lav first and Rubio, and then that, that got canceled as well. And if you look at the sort of ramp up in attacks over recent months on the Ukrainian energy infrastructure and also from Ukraine on Russia's infrastructure, which has taken a quite significant sort of, damage over the last few months. It's really impacted. You look at the local diesel prices, et cetera, and shortages, and I think a peace deal doesn't look that much on the cards at the moment. I know Trump posted something yesterday on truth saying, know ceases, fire immediately, et cetera. But there doesn't seem to be any will really. I think Zelensky has been making these trips and trying to get these talks started to perhaps start with a cease fire and then you start talking about the rest of it, but still looks quite a long way away. And this is, we are now, what is it, 2022. This started, sort, all started building up in this time of year in 2021 with the troops at the border, et cetera. So really four years on. And we haven't got any close room. It's this constant drone missile exchange. Yeah. So

Richard Sverrisson - Editor-in-Chief, Montel News: 24:42

it does take two to tango doesn't

Wayne Bryan - Research Principal, London Stock Exchange Group: 24:43

it takes as the it takes to tan tango? It doesn't seem to me. Yeah, it seems Putin meetings are stalling. It's always about stalling. I think the latest offer for a meeting was because the US raised the specter of tomahawk missiles. Which would really allow Ukraine to target most things they want across Russia. So that happened and then the meetings got canceled. But now you see Trump is getting more irate. But yeah, something needs to happen. And I think as well, if you look at America's sort of policy, not only on that side where they've been failing with this ceasefire, but also if you look at these tariff sanctions, where's the implementation of the sanctions on Arctic to LNG? China's taken these cargoes I've heard nothing from America, but I thought these are meant to be sanctioned. Where's the implementation of that? So that's another thing that doesn't quite. Strike well with me, to be honest. When you have these sanction in play and there's a blatant proof of these cargoes arriving, but we've seen nothing.

Richard Sverrisson - Editor-in-Chief, Montel News: 25:36

From Russia to China.

Wayne Bryan - Research Principal, London Stock Exchange Group: 25:37

Yeah, exactly. We've seen nothing from the US on,

Richard Sverrisson - Editor-in-Chief, Montel News: 25:40

I mean, that adds to the global supply as well though doesn't in a sense does otherwise. It would be a lot tighter. Yeah.

Wayne Bryan - Research Principal, London Stock Exchange Group: 25:46

Correct. Yeah.

Richard Sverrisson - Editor-in-Chief, Montel News: 25:46

Just a final question, Wayne. I think we could talk for hours as we do anyway we could, but often, but I Do you think there's enough flexibility and cooperation between countries in Europe to keep the gas flowing?

Wayne Bryan - Research Principal, London Stock Exchange Group: 25:58

Yeah. I think so. We have these agreements with, security supply and cross border flows. So I think we're, we are better. We've extended, obviously I mentioned the LNG reification we've had. Yeah. Measures to help curb price movements and volatility, or not the price cap I'm talking about. So we've had several measures. The demand, destruction, or demand reduction. So I think Europe, yeah. And if you look at sort of margins, peak demand, peak supply, there's still some wiggle room. I don't think we're ever gonna see a situation where the lights go off as we know. But yeah, I think Europe has put itself. Again, despite the loss of significant amounts of gas, I think the transition has been pretty remarkable in terms of how we've adjusted. And managed to bring prices back down to where they are still above obviously pre-crisis levels, but we brought them down significantly. We really have to

Richard Sverrisson - Editor-in-Chief, Montel News: 26:46

Manageable levels. Absolutely.

Wayne Bryan - Research Principal, London Stock Exchange Group: 26:47

Yeah. And so you see a lot of the hub prices now quite converged, which shows you, again, of course your typical, like your utilities, and that was a little bit higher. Again, that shows again, there's, a bit more harmony in Europe at the moment. But again we still see a lot of things to that can change over this. Not only the winter, but over the next 12 months. There's a lot we've just spoke about with LNG bands and ongoing wars and tariffs and the picture could be a lot different if we have this conversation in March.

Richard Sverrisson - Editor-in-Chief, Montel News: 27:13

Yeah, a lot could change Wayne, maybe to summarize, we're in a much better place now, maybe in a fairly good place compared to where we could have been or where we were a couple of years ago

Wayne Bryan - Research Principal, London Stock Exchange Group: 27:23

Exactly, and that's what we had a webinar title that sort kind of come, like you said, like the last dance, but it's the last winter. Really? The, is it, is this the last tight winter? If it is, look at the prices. They're close to summer prices now, summer's around 30 euros. We're about 31, 32 now, so yeah. Big difference to last year.

Richard Sverrisson - Editor-in-Chief, Montel News: 27:41

If anything changes, Wayne. We'll call on you to give us your expert comments. Again, thank you very much for being, thank you very much. A guest on the Plugged In Podcast.

Wayne Bryan - Research Principal, London Stock Exchange Group: 27:48

Thank you.

Richard Sverrisson - Editor-in-Chief, Montel News: 27:50

It is been an excellent and insightful discussion. I hope you agree, listeners, and thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, blueSky, and other social media channels. See you next time.