A healthy supply picture saw seasonal gas contracts move lower in September.
The Winter’23 contract traded relatively flat throughout September before falling towards the end of the month. Concerns over strike action at the Chevron Gorgon and Wheatstone LNG (Liquified Natural Gas) facilities remained a key driver of the front-season contract. Prices were initially pushed higher after Chevron and the Offshore Alliance failed to come to an agreement. This led to increased industrial action at the Gorgon and Wheatstone and threats of a full two-week shutdown. Later in the month, the dispute between Chevron and unions was heard by Australia's industrial relations tribunal, Fair Work Commission. The case was the first test of the new laws first introduced in June this year, which empowered an umpire to force parties into an agreement. Reports that a deal was met weighed on the Winter’23 contract in the last week of September. Furthermore, the addition of several LNG cargoes to the October schedule alleviated concerns over weak LNG supply
Power prices fell in September.
The day-ahead price found some support early in September by restricted imports via the IFA interconnector due to maintenance. However, stormy weather on several occasions resulted in some volatility and saw the price fall as low as £49.25/MWh on the 19th. However, downside was limited at the end of the month amid forecasts of lower wind speeds after the passing of storm Agatha which supported the gas for power demand outlook. Further out on the curve, seasonal power contracts declined in September. Overall prices remained in the same sideways range seen over recent months but have fallen from last month’s close. Prices took direction from news that strike action had been averted at Chevron’s LNG facilities in Australia after both sides agreed to a deal put forward by the country’s industrial arbitrator. Further downwards pressure came from easing concerns surrounding French nuclear output this winter as output is setting to be higher year-on-year according to reports. As a result, the Summer’24 contract fell by around 12% month-on-month.
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