Gas Summary at European Close: TTF Rebounds

TTF is rebounding and has risen to new intra-day highs, driven by further escalation in the Israel conflict as battles between Israel’s military and Hamas are intensifying. Meanwhile, Russia’s Wagner group may provide air defence weapons to Hezbollah according to US Intelligence. Front month traded lower earlier in the session due to bearish short-term fundamentals and the resumption of Israel’s gas flows to Egypt.

• TTF DEC 23 up 2.9% at 49.15€/MWh
• TTF Q1 24 up 2.4% at 51.07€/MWh
• Israel has resumed gas flows to Egypt from its 12.4 bcm/y Leviathan gas field, according to Argus citing market sources. The return comes after recent technical issues at the 6.5 bcm/y Karish gas field meant that Leviathan flows to Egypt were redirected to prioritise domestic supply.
• Wires reporting comments from a BDO Israel report claiming that Israel is exporting 70% less natural gas since it shut down its Tamar field, and that the economic toll on Israel of said closure amounts to ~USD200mn/month.
• The latest weather forecast is relatively unchanged with above normal temperatures for NW and central Europe this week before drifting back towards normal or just below in the second week of the outlook.
• Norwegian pipeline supplies to Europe are today up to 329.6mcm/d after gradually recovering from just below 304mcm/d on 28 Oct.
• European natural gas storage levels are still building slightly and up to 99.32% full on 1 Nov according to GIE data compared to the five-year average of 90.1%.
• German natural gas consumption in calendar week 42 – 16-22 October – stood 15.2% below the 2018-2021 average, while household demand surpassed 2022 levels by almost 55% due ­­to colder weather, Bnetza data showed.
• The EU plans to cut imports of Russian gas to 40-45 bcm in 2023 as it seeks to reduce its energy independence on Russia, according to the European Commission and reported by Interfax.
• European companies have a “pure commercial risk” in using Ukraine gas storage with European entities holding over 2bcm in store according to FT citing Naftogaz.
• Total European LNG send out is edging higher up to 386mcm/d on 31 Oct compared to an average for October of about 326mcm/d and 367mcm/d seen in Oct 2022 according to Bloomberg.
• LNG traders are looking to procure Asian shipments to avoid the Panama Canal, as drought ­­conditions led to cuts in slots for ship transits according to Bloomberg.
• Russian LNG exports will maintain last year’s pace in 2023 according to Russian Energy Minister Nikolai Shulginov.
• Russia’s Gazprom delivered its second shipment of LNG to China Nov. 2, according to Reuters, sending the cargo via the Suez Canal.
• Chevron is negotiating possible LNG supply contracts for Europe for the duration of 15 years as European buyers are expecting the region to rely for longer than previously thought on gas, Colin Parfitt, head of Chevron's trading, shipping and pipeline operations, said, cited by Reuters.
• Azerbaijan’s production of marketable natural gas will reach its peak in 2025 at 36 bcm, according to Azerbaijan’s Economy Minister Mikayil Jabbarov.
• Cheniere Energy is aiming to start the Corpus Christi Stage 3 expansion in late 2024 months earlier than initially projected according to the company’s third-quarter earnings call.
• The US has imposed a new set of sanctions measures against Russia Nov. 2, aimed at Russia’s future energy capabilities. The latest measures will target a major entity involved in the development of the Arctic-2 LNG project, limiting its access to the necessary western technology.