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Traders expect low uptake of 5-year Latvian gas storage

  • : Natural gas
  • 25/01/28

Market participants expect limited demand for a new five-year gas storage product that Latvian operator Conexus will begin offering later this year.

Conexus will offer a five-year product for its 25TWh Incukalns storage site for the first time ever on 11 February. This five-year offering will be in addition to the one and two-year products already previously offered by Conexus, along with the storage transfer and interruptible capacity products.

All market participants surveyed by Argus expect weak demand for the five-year product, mostly because of unfavourable summer-winter spreads and traders' lack of willingness to commit to bookings that far ahead. Several respondents highlighted that only a limited pool of firms would be interested in planning their activities five years out. Most traders "do not look to the so distant future in the gas storage business", one said. "Not so many market players are ready to tie themselves to local gas markets for five storage cycles in a row," another said.

Several respondents criticised the product's rules, with one noting that it could even lead to storage utilisation falling, "considering the fines for inventory transfer between storage seasons". Traders would try to "squeeze out the pipeline/LNG supply potential, rather than over-injecting", they added. Another said they were concerned that the share of the overall storage capacity allocated to the five-year product was "too high" and would make it possible for some market participants to "hijack this very much needed capacity in a similar way" to what happens at the Latvian-Lithuanian border point of Kiemenai. Several traders have expressed frustration that annual capacity at Kiemenai has been fully booked but only a small part is at times used, blocking other shippers from accessing the capacity and resulting in low utilisation rates.

Another trader highlighted the product's limitation of only allowing a user to transfer up to 50pc of the total booked capacity from one storage cycle to the next without having to pay additional fees.

The previous set of capacity products has been "tested for years and proven to be working", another market participant said, arguing that "imperfect but certain conditions are better than uncertain ones".

One trader pointed out that a lack of interest in the five-year product could increase demand for the traditional one and two-year products, increasing the premium at these auctions further. Two other traders pointed out that given prevailing inverted summer-winter spreads, there is little financial incentive to book any capacity products, let alone make a five-year commitment. Ultimately, the "behaviour of local players is and will continue to be influenced by the closest summer-winter spread and the difference between this spread and the one-year storage tariff, not by long-term storage capacity of injection/withdrawal limits," one concluded.


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25/02/03

Trump makes U-turn on Canada, Mexico tariffs: Update

Trump makes U-turn on Canada, Mexico tariffs: Update

Washington, 3 February (Argus) — US president Donald Trump reversed course on planned tariffs on imports from Canada and Mexico, delaying their implementation by one month. Trump over the weekend issued executive orders for a 25pc tariff on all imports from Mexico, a 25pc tariff on non-energy imports from Canada, a 10pc tax on Canadian energy imports and a 10pc tariff on all imports from China, all to be effective on 4 February. But Trump delayed the tariffs on Mexico and Canada by a month and has indicated that tariffs on China likewise could be subject to negotiations with Beijing. Trump's decision-making on Mexico and Canada tariffs so far looks like a signature move from his first term — escalatory rhetoric and action followed by de-escalation after extracting concessions that do not appear to be significant. Trump said today he agreed to postpone the implementation of tariffs on Mexican goods after receiving assurances from Mexico president Claudia Sheinbaum that she would immediately reinforce the shared border with 10,000 national guard troops. Trump also cited similar assurances from Canadian prime minister Justin Trudeau. "As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that," Trump said via his social media platform. "I am very pleased with this initial outcome." In both cases, the border security pledges touted by Sheinbaum and Trudeau recast initiatives already planned or underway. Trump told reporters today he would "be speaking to China probably over the next 24 hours" — likely meaning the country's president Xi Jinping. Unlike Mexico and Canada, China has taken a restrained stance to Trump's announcement of tariffs. Like the US immediate neighbors, China already has been taking steps to cut off the illegal manufacturing and exports of precursors for fentanyl — the pretext for Trump's tariffs. Things can only get bitter The announcement of tariffs that would have directly hit US energy trade will leave many in the industry scratching their heads about Trump's future moves. A major trade war that would have severely curtailed the flow of energy and other commodities across North America is averted for now, but Trump is signaling that tariffs remain a key plank on his policy agenda. Trump has shrugged off any negative impacts on the US energy sector and the broader economy, saying over the weekend that "WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID." In remarks to reporters today, Trump pushed back against criticism of negative impacts of his tariffs. "Very simply, every single country that you're writing about right now is dying to make a deal," Trump said. In the immediate term, the Trump administration will hold high-level talks with the governments of Mexico and Canada against the deadline for the delayed imposition of tariffs. But down the line, there are other motivations for Trump to move forward with tariffs against key US trading partners. Trump today once again decried the "massive deficits" the US has in trade with Canada, Mexico, China, the EU and the UK. And then there is the lure of tariff revenue that Trump — with an eye toward upcoming congressional deliberation of extending tax cuts beyond 2025 — says would be sufficient to offset lower personal and corporate taxes. Trump set a 1 April deadline for US government agencies to prepare a report on "unfair trade practices" by key US trading partners, which would kick off a legal process for imposing tariffs in the following two months. Trump is separately planning to review the US-Mexico-Canada free trade agreement that his first administration negotiated in 2019. Unlike the tariffs that were due to be imposed on Tuesday by an executive order, the broader plan for tariffs scheduled to kick in after 1 April would be harder to reverse or to negotiate away. And his first two weeks in office show that, despite his claim to be championing America's "energy dominance", the US energy industry would not be exempt during the upcoming trade wars. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US delays Canada tariffs by a month: Trudeau


25/02/03
25/02/03

US delays Canada tariffs by a month: Trudeau

Calgary, 3 February (Argus) — US tariffs threatened against Canada will be delayed by 30 days, prime minister Justin Trudeau said this afternoon after talking with US president Donald Trump. "I just had a good call with President Trump," Trudeau posted on X, before describing Canada's plan to send thousands of officials to the US border to police fentanyl trafficking. The two leaders spoke twice on Monday, the eve of sweeping tariffs Trump had proposed against Canada and Mexico . Earlier in the day Mexican tariffs were also delayed by a month after similar promises for more troops on the border. "Nearly 10,000 frontline personnel are and will be working on protecting the border," Trudeau wrote. "In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-US Joint Strike Force to combat organized crime, fentanyl and money laundering." Canada will be putting C$200mn ($139mn) towards tackling organized crime and fentanyl. In light of the US-Canada tariff pause, manufacturing and mineral-heavy Ontario said it would pause retaliation measures of its own announced earlier in the day. That would have banned US companies from provincial contracts, removed American products in liquor stores and cancelled a contract with Elon Musk's Starlink internet services. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump defends U-turn on Mexico tariffs


25/02/03
25/02/03

Trump defends U-turn on Mexico tariffs

Washington, 3 February (Argus) — US president Donald Trump insisted today that his abrupt decision to delay by a month the decision to impose 25pc tariffs on imports from Mexico had nothing to do with the reaction of financial markets or criticism from the normally reliable quarters of his support. Trump's decision-making on Mexico tariffs so far looks like a signature move from his first term — escalatory rhetoric and action followed by de-escalation after extracting concessions that do not appear to be significant. Trump said today he agreed to postpone the 4 February implementation of 25pc tariffs on Mexican goods by one month, after receiving assurances from Mexico president Claduia Sheinbaum that she would immediately reinforce the shared border with 10,000 national guard troops. Trump said there would be negotiations in the coming weeks between Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick to prevent the tariffs from going into effect. Trump's plans to impose import taxes on Mexico, Canada and China weighed on stock markets early on Monday and boosted oil prices and the US dollar. The effects of his tariffs and any retaliatory actions by Mexico would have been felt on both sides of the border and would have severely curtailed the flow of energy and other commodities between the two countries. "There was no blinking", Trump said in a free-flowing gaggle with reporters at the White House. "She did agree to 10,000 soldiers on the border. I would say that's a lot." Trump in 2019 similarly threatened to impose 5pc tariffs on all Mexican goods. He relented when former president Andres Manuel Lopez Obrador said Mexico would deploy 21,000 national guard troops to contain the flow of migrants toward the US. "Dumbest Trade War" or deal pathway? Trump, who invited the press into the Oval Office today to observe the signing of an executive order establishing a sovereign wealth fund for the US, heaped praise on News Corp owner Rupert Murdoch, who was invited as a guest at the ceremony. But Trump pushed back against News Corp-owned Wall Street Journal 's editorial board, which described his tariffs on US neighbors as "the Dumbest Trade War". "I don't agree with [Murdoch] on many things," Trump said. "The Wall Street Journal is wrong, because, very simply, every single country that you're writing about right now is dying to make a deal." Canada, which is also subject to a 25pc tariffs beginning tomorrow, so far has not made a deal with the US. Trump said he spoke with Canadian prime minister Justin Trudeau this morning and would speak again at 3pm ET. "We're going to talk again at three o'clock, right after my next meeting, and we'll see what happens," Trump said. "I can't tell you what's going to happen." The US has yet to offer details on implementing tariffs or to break down which Canadian energy commodities would be subject to a lower, 10pc import tax. The White House executive order listed the exemptions as "crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water and critical minerals". Trudeau's government has unveiled a more detailed list of US imports , worth C$30bn ($21bn), that would be subject to retaliatory tariffs, to be followed by an additional C$125bn of products later this month. Trump, who imposed a lower, 10pc, tariff on imports from China, said today that imports from that country would be subject to higher taxes soon. But he added, "I will be speaking to China probably over the next 24 hours." Trump today again proposed a joint US-China ownership of social media platform TikTok, the latest of many issues that divide the two countries. He also repeated his allegation that China "is involved with the Panama Canal" and that the US would wrest back control over the waterway. In addition to pushback over tariffs, Trump today faced harsh criticism from Democratic lawmakers after he ordered the shutdown of the US Agency for International Development, which is responsible for disbursing US humanitarian aid and carrying out development programs globally. Senior Democratic lawmakers joined the staff of the agency in front of its headquarters, where security guards were preventing anyone from entering. "I love the concept [of that agency], but they turned out to be radical left lunatics," Trump said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ice TTF gas risk reduction contract positions soar


25/02/03
25/02/03

Ice TTF gas risk reduction contract positions soar

London, 3 February (Argus) — Risk reduction contracts held at the Dutch TTF gas trading point on the Intercontinental Exchange (Ice) soared to a near record high in the week ending 24 January, suggesting significant hedging activity. Firms take on risk reduction contracts mostly for hedging purposes — they offset a physical position with a paper position so as to reduce exposure to price fluctuations. When firms inject gas into storage, they might for example open a risk reduction contract on paper to offset this position in the future. The gross amount of gas that commercial undertakings hold under long and short risk reduction contracts combined reached its second highest since at least 2018 at 1.38PWh in the week ending 24 January, the most recent data from Ice ( see risk reduction graph ) show. Firms increased their long positions by 19TWh week on week to 581TWh, and their short positions by 13TWh to 794TWh. After netting the two off, commercial undertakings hold a net short position of around 214TWh of risk reduction contracts, down from a recent peak of 228TWh in the week ending 3 January. Higher LNG deliveries to Europe in recent weeks may have driven some of the interest in risk reduction contracts, given that importers need to hedge ahead of time in order to lock in margins. TTF prices have increased enough in recent weeks to firmly close the arbitrage between the Atlantic and Pacific basins, attracting more LNG cargoes to Europe. European LNG imports soared in January to their highest for any month since April 2023. The TTF summer 2025 contract's growing premium to the winter 2025-26 market may have additionally boosted interest in risk reduction contracts. The spread widened sharply after Germany's THE announced a consultation for a new kind of storage tender that would subsidise injections if seasonal spreads stay inverted , with many traders seeing this as a signal that German storage sites will be refilled , regardless of commercial incentives. The TTF summer 2025-winter 2025-26 spread jumped to +€4/MWh on 21 January, the day of THE's announcement, from +€2.73/MWh a day earlier, and widened further to as high as +€6.39/MWh by 30 January. In terms of total net positions across all contract types, investment funds held a net long of nearly 278TWh in the week ending 24 January, the highest since late November. At the same time, investment and credit firms held their highest net short position since October 2021 at 245TWh. Commercial undertakings held a net total short position of 33TWh ( see net positions graph ). By Brendan A'Hearn ICE TTF net contract position TWh Commercial undertakings' risk reduction contract positions TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US manufacturing expands in Jan after 26 months: ISM


25/02/03
25/02/03

US manufacturing expands in Jan after 26 months: ISM

Houston, 3 February (Argus) — US manufacturing activity expanded in January after 26 consecutive months of contraction, according to the Institute for Supply Management's latest factory survey. The manufacturing purchasing managers' index (PMI) registered 50.9 in January, up from 49.2 in December. The new orders index rose to 55.1 last month from 52.1 in December, marking a third month of expansion. Readings above 50 signal expansion while readings under that point to contraction. Production rose to 52.5 last month from 49.9 the prior month. Employment rose to 50.3 from 45.4. "Demand clearly improved, while output expanded and inputs remained accommodative," ISM said. "Demand and production improved; and employment expanded." US factory activity expanded robustly in the first two years after Covid-19 hit, then contracted for the subsequent two years, even as growth in services activity, the largest part of the economy, maintained the overall economy in expansion territory. The new export orders index rose by 2.4 points to 52.4 and the imports index rose by 1.4 points to 51.1. The prices index rose to 54.9 from 52.5, with aluminum, freight rates, natural gas, and scrap among gainers. "Prices growth was moderate, indicating that further growth will put additional pressure on prices," ISM said. The inventories index fell by 2.5 to 45.9, signaling contracting inventories. Backlog of orders fell by one point to 44.9, indicating order backlogs contracted for the 28th consecutive month after 27 months of expansion. Supplier deliveries rose by 0.8 to 50.9, suggesting marginally slower deliveries. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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