Every quarter we publish an update of our Natural Gas Storage and Swing Report. It presents price assessments of a few standard storage and swing contracts, which you can benchmark to your own valuations. Above all, the report provides transparency to an otherwise opaque trading market, also revealing the underlying assumptions about market prices, market volatilities and trading strategies. Take advantage of our free service to you!
With our Natural Gas Storage and Swing report, we report about a few selected contracts. But of course we realize that you may have different needs! Our report compares the current quarter to the previous, but would you need data per month? Or do you need historical valuations? Or over a longer horizon? No problem, just contact us for more information.
We have in the past made customized reports for very different types of companies. For example, we provided data that was used in several arbitration cases between energy companies. Also companies used our analysis to facilitate their investment or divestment decisions.
Gas spot prices continued in the fourth quarter of 2020 the bullish trend started in the previous quarter.
After record low prices in the beginning of the Summer (TTF spot just above 3 €/MWh), TTF prices closed 2020 at 19€/MWh. This is not only the highest value seen in 2020 but a level not seen since early February 2019! The main reasons are fears for supply tightness in winter, with less LNG expected to flow to Europe as compared to the previous winter. Spot volatility decreased slightly over the quarter, reflecting the fact the bullish price trend is a rather continuous directional process.
As is more often the case, prompt bullishness had less effect on the longer dated prices. During Q4-2020, the forward curve went from contango into backwardation. The TTF storage spread we watch (Q1-22 x Q3-21) decreased with about one third over this quarter, from 2.67€/MWh to 1.77 €/MWh. On the NBP the storage spread decreased with just over 10% to 10.6p/th.
To read the complete report with graphs and tables, please click here: KYOS Gas Storage and Swing report Nr 29 Jan 2021
All valuations have been performed with KYOS software and models, KyStore and KySwing. KyStore and KySwing support traders, portfolio and risk managers in natural gas markets. Inputs include market parameters, together with our own suggestions, forward curves and other parameters and settings. The model calculates the intrinsic value based on the forward curve and takes tradable products and bid/ask spreads into account. Our software uses Monte Carlo simulations of spot and forward prices to provide the rolling intrinsic and option values. Numerous companies in the energy industry already use our valuation software. You can find more information about our gas optimization software on our solutions page here.
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