Gas Summary at European Close: TTF Plummets

TTF front month has fallen to the lowest level since 16 October as currently no signs suggest that the ground offensive in Israel is causing an escalation of the conflict to the wider Middle East region which could further pose supply risks. Bearish short-term fundamentals with near-full storage, low demand due to mild weather and forecasts for high wind power output in NW Europe are adding further downside.

• TTF DEC 23 down -9.7% at 47.9€/MWh
• TTF Q1 24 down -8.9% at 50.01€/MWh
• The latest weather forecast is relatively unchanged with above normal temperatures for NW and central Europe in the coming week but drifting back towards normal or just below in the second week of the outlook.
• Norwegian pipeline supplies to Europe are today up to 322.6mcm/d after seeing a gradual recovery since dipping below 300mcm/d on 22 Oct.
• End of season injections into European natural gas storage continue to bring levels up to 99.25% full on 29 Oct according to GIE data compared to the five year average of 90.1%. Net injections have increased in the last few days and well above the average rates from the previous five years. Net injections averaged about 1,006GWh/d in the week to 29 Oct compared to the five year average for the period of just 331GWh/d.
• Europe is prepared for higher gas demand this winter noting that storage is full and demand behaviour has changed according to chief operating officer at EEX.
• Europe continues to face several potential gas supply risks this winter, stressing the importance of long-term gas supplies to the continent, Wintershall Dea’s CEO Mario Mehren said to S&P Commodity Insights.
• Balticconnector: The inspection into the incident at the Balticconnector pipeline has been completed last weekend and the analysis is currently underway, Finland’s Gasgrid said.
• Ukraine does not plan to transit Russian natural gas to Europe beyond Dec 2024 according to ICIS citing Naftogaz Ukraine. Russia's five-year transit deal with Ukraine signed at the end of 2019 expires in December 2024
• Total European LNG sendout was at 341mcm/d on 29 Oct with an average for October of about 323mcm/d.
• The total estimated quantity of LNG on tankers that have not unloaded for at least 20 days rose by 19% last week to the highest since at least 2017, when Bloomberg started recording data.
• Global weekly LNG imports in the week of 23-29 October stood at 6.3mn tons, down 12% on the week, driven lower flows into JKCT and India, BNEF data showed.
• BNEF revised down its forecasts for LNG exports out of Egypt during this winter to 2.7mn tons, or around 41 cargoes, from 4.4mn tons forecasted earlier in October, after the Israel-Hamas conflict caused a halt to natural gas pipeline flows from Israel to Egypt.
• Mitsui is checking the impact of recent sanctions on the Arctic LNG 2 export project in Russia to assess whether the project will be able to start by year-end according to CFO Tetsuya Shigeta.
• QatarEnergy’s recently signed long-term contracts for European deliveries are likely to have included European natural gas hubs as part of the pricing index, according to Platts.