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Retail data from the British Retail Consortium reveals a continued easing in shop prices throughout November, though at a slower pace than October. This trend suggests renewed financial pressure on consumers' disposable incomes. Across Europe, consumer confidence paints a bleak picture. German sentiment is projected to plummet next month, with income expectations hitting a nine-month low amid growing recession fears. Similarly, in France, November saw consumer confidence fall to its lowest point in five months due to economic concerns and rising unemployment. Meanwhile, the US dollar gained strength in November, and American stock markets reached record highs, driven by optimism around President-elect Trump’s proposed low-tax, deregulation, and spending policies. Conversely, European equities weakened amid apprehensions about tariffs potentially damaging the region's economy.
November brought a decline in global oil prices compared to October highs, as market attention shifted from supply risks to concerns over weak global demand and ample supply. Brent crude fluctuated between $70 and $76 per barrel, closing the month at $73.25. OPEC, meanwhile, lowered its global oil demand growth forecast for 2024 for the fourth consecutive month, attributing this to weaker-than-expected consumption in China and India. Geopolitical tensions eased following a ceasefire agreement in the Middle East, reducing the geopolitical risk premium and fears of supply disruptions.
Drax announced delays in commissioning three open-cycle gas power plants due to grid connection issues. These facilities, each with 299 MW capacity and located in South Wales, Suffolk, and Buckinghamshire, are now slated for early 2025 completion. Ofgem has approved a £2 billion funding deal for the Eastern Green Link 1, a power link between Scotland and England capable of transporting 2GW. The regulator is also consulting on a proposed £5–8 billion investment fund aimed at reducing transmission delays and costs. Germany’s solar sector is set for a record-breaking year, with 17.5 GW of new capacity added, bringing the total to 96.1 GW. The government’s 2030 target is 215 GW.
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US liquefied natural gas (LNG) activity increased in November, with flows to export plants reaching a 10-month high. This includes initial activity at Venture Global’s Plaquemines facility in Louisiana, the country’s eighth LNG export plant, set to begin production by year-end. In Europe, Gazprom's outlook indicates no gas transit via Ukraine by 2025, which would reduce Russian gas exports to Europe and Turkey to just below 39 bcm, down from over 49 bcm in 2023. Amid sanctions, Turkey is negotiating with the US and Russia for exemptions to continue using Gazprombank for gas payments. European scrutiny of Russian LNG shipments persists, with 2023 volumes expected to match the 2022 record of 20 bcm. Storage withdrawals accelerated in November, influenced by low wind generation and colder-than-average weather, reducing European storage levels to 86.7%, an 8.5% month-on-month drop.
Short-term gas and power prices have fallen due to mild weather, strong winds, and increased LNG deliveries to Europe. Longer-term prices softened accordingly. However, several factors are likely to exert upward pressure in the coming weeks: a weaker Euro and Sterling against the US dollar, anticipated cessation of Russian gas transits via Ukraine, and recent US sanctions on Gazprombank. These developments could disrupt Russian LNG imports and gas supplies through Turkey. As the supply context tightens, weather patterns and wind generation will remain pivotal for price stability, with storage levels providing a critical indicator for potential price spikes during winter.
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