Germany’s prime carmaker Volkswagen Group, producer of Audi and VW, has committed to invest €30 billion in battery-powered vehicles until 2023. Despite limited raw materials and few available e-car charging stations, there is "significant opportunity," analysts say, suggesting; "For auto manufactures, it could be a case of evolve or die out.”
The German finance ministry has made clear it will not pay more into the EU budget to bolster the Commission’s ambitious €1 trillion Green Deal. The ministry said if the EU budget remained at 1 percent of economic output, this would give "enough leeway for mustering the necessary funds through priority setting."
Bearish sentiment prevails at the U.S. benchmark Henry Hub where gas prices have tumbled to multi-year lows, dragging down wholesale electricity prices at several major hubs like PJM Interconnection and the ISOs in New England, and New York. In Texas, however, high demand and low reserve margins pushed up prices in the peak summer season.
Surging supply from the U.S. and stuttering demand growth in Asia means that in 2020, “Europe will again be called upon to save the day,” said Wood Mackenzie research director Robert Sims. With gas inventories at record highs, European gas buyers are looking for flexible supply, or increased demand creation from within the power sector.
Flow data shows U.S. natural gas output in the Lower 48 states has gained 7.0 billion cubic feet per day y/y to date in January, as shippers struggle with restrictions across the TETCO pipeline network in Appalachia. The return of cold weather this week, and long-term rig decline across Appalachia, starts to drag down production and pushes up gas prices.
The Japanese government keeps watering down its green energy goals, bowing to cost pressure in the face of slower macroeconomic growth. Ambitious targets to decrease gas and coal generation to 27 percent and 26 percent shares, respectively, and offset that lost capacity with nuclear and renewables, are no longer being pursued.
China’s Blue Sky Policy envisages boosting the share of natural gas in the energy mix from currently 7.5 percent to 15 percent by 2030 which requires substantial investment in LNG and pipeline import capacity and related infrastructure. Imports are forecast to meet more than 70 percent of gas consumption in Greater China in 2040.
Spot gas prices at the U.S. benchmark Henry Hub in Louisiana have fallen to their lowest level in the past year since 2016 as domestic production keeps growing. “Lower natural gas prices in 2019 supported higher consumption – particularly in the electric generation sector – and higher natural gas exports,” EIA analysts commented.
The energy portion of the S&P Goldman Sachs Commodity Index (GSCI) has risen faster than other commodities over the course of 2019 with prices of WTI and Brent crude oil up 31 percent and 20 percent, respectively. In contrast, natural gas futures sold on NYMEX fell 26 percent to end the year at $2.19/MMBtu — the largest decline of all commodities in the index.
Traded volumes of natural gas in European brokered markets have soared nearly 22% to reach 30,496 TWh in the period from January-November, according to the London Energy Brokers’ Association (Leba). Volumes on the Dutch TTF – Europe’s most liquid hub – increased over 21%, while UK NBP trading fell nearly 27%.
Germany’s largest utility Uniper strives to fast-track permitting and construction of a floating storage and regas unit (FSRU) in Brunsbüttel to importLNG from Australia, among others.To that end, Uniper agreed with Woodside Energy Trading Singapore to import 0.5 mtpa initially from 2023, which will be increased to 1 mtpa by 2025.