POWER: Italy December Power Rises on Gas
Nov-18 08:26
The Italian December power base-load contract is trending higher with gains in EU gas prices. The front-month premium to the French market has narrowed to €44.62/MWh, compared with the November high of €49.40/MWh.
- Italy Base Power DEC 25 up 0.9% at 115.1 EUR/MWh
- Italy Power Cal 26 closed down 0.2% at 104.25 EUR/MWh on 17 Nov
- TTF Gas DEC 25 up 1.3% at 31.82 EUR/MWh
- EUA DEC 25 up 0.4% at 80.25 EUR/MT
- TTF front month is extending the rally from a low of €30.285/MWh on Nov. 13 with support from cold weather in Europe this week.
- Italy front-month power/TTF 30-day correlation stood at 0.85 as of Tuesday morning.
- The latest two-week ECMWF weather forecast for Rome suggests mean temperatures have been revised up to drop well below normal late this week and next week before rising back up.
- Mean temperatures in Rome are forecast at 12C on Wednesday, from 13.7C on Tuesday and below the seasonal average of 13.2C.
- The PUN index settled at €116.64/MWh for Tuesday’s delivery, from €107.16/MWh for Monday’s delivery.
- Wind output in Italy is forecast at 988MW on Wednesday during base load, from 2.06GW on Tuesday, according to SpotRenewables.
- Italian wind output is forecast at 988MW to 4.56GW during base load on 19-27 November.
- Residual load in Italy is forecast at 30.43GWh/h on Wednesday, from 28.81GWh/h on Tuesday, Reuters data showed.
- Power demand in Italy is forecast at 34.4GWh/h on Wednesday, from 34.36GWh/h on Tuesday, Reuters data showed.
- Italian residential/commercial gas demand is forecast at 125mcm/d on Wednesday, from 119.4mcm/d on Tuesday and revised down from 126.8mcm/d previously, Bloomberg data showed.
- Italy’s hydro balance forecast has been revised down to end at -994GWh on 2 December, from -793GWh previously, Bloomberg data showed.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
Oct-17 20:51
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
Oct-17 20:30
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Oct-17 20:28
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
