Mid-Day Gas Summary: TTF Declines on Supplies, Storage

Front month TTF has reversed the initial gains seen earlier today with healthy near term supplies and high storage offsetting the risks from higher demand due to cooler weather in January and rising Middle East tensions.

• TTF FEB 24 down -1.3% at 31.94€/MWh
• TTF SUM 24 down -1.5% at 31.8€/MWh
• Temperatures in NW and central Europe are expected to fall below normal from around Jan 6 and remain cold into the middle of the month.
• European natural gas storage is holding well above normal at 86.51% full on Dec 31 according to GIE data compared to the seasonal five year average of 73.9% with below normal withdrawals throughout much of December.
• Natural gas withdrawals from Ukraine storage by European companies has accelerated since November amid an increase in heating demand according to FT and Argus. European entities had stored about 2.5bcm of natural gas in Ukraine ahead of the winter, according to Naftogaz.
• Gas supply to Germany this winter is secure but instability in the Middle East is a risk with reliance on LNG supplies from the Gulf according to E.ON.
• Spanish natural gas demand was set to end the year 2023 at 325.4WTh, 10.7% down on the year, largely due to a decline gas use for power generation, Enagas said last week.
• US LNG exports are currently more profitable to Asia in February, March and April. Exports are more profitable to Europe in May according to BNEF.
• US LNG exports rose by 12% on the year to 87mn tons in 2023, making the US the largest LNG exporter, followed by Qatar and Australia, ICIS data showed.
• China’s natural gas demand is expected to rise by 6-8% on the year in 2024 according to the Chongqing Petroleum and Gas Exchange, cited by Bloomberg.
• China regained the position as the largest global LNG importer of LNG as imports rose 13% y/y to 72m tonnes in 2023 according to ICIS.