Mid-Day Gas Summary: TTF Surges on Weather, Shipping Risks

Front month TTF is trading higher but eased back from an intra-day high of €37.35/MWh supported by LNG supply risks due to tensions in the Middle East, amid US air strikes in Iraq and a renewed attack on a container vessel by Iran-backed Houthi rebels. Forecasts for slightly colder weather in mid-January are adding further upside.

• TTF JAN 24 up 4.8% at 35.82€/MWh
• TTF Q1 24 up 5.1% at 36.17€/MWh
• TTF SUM 24 up 4.6% at 35.65€/MWh
• Concerns over shipping in the Red Sea continue to support crude markets. On Tuesday Houthi revels attacked the MSC United VIII container ship that was headed for Pakistan. Despite that, major shipping firms such as Maersk and CMA CGM were resuming passage through the Red Sea. Hapag-Lloyd will decide today whether to resume Red Sea shipping.
• Latest weather forecasts expect above-normal temperatures across NW Europe through the first week of January. Temperatures are forecast to fall below the average from 10 January.
• European natural gas storage stood at 87.08% as of 25 December, above the five-year average of 75.106% according to GIE.
• Russia will export more than 22bcm of natural gas to China this year via the Power of Siberia 1 pipeline, Russian Deputy Prime Minister Alexander Novak said, cited by Reuters.
• LNG sendout to North West Europe stood at 218.97mcm/d as of 21 December, 18% below the 30-day average according to Bloomberg.
• The first train of Russia’s Arctic LNG 2 project has started production, Russian Deputy PM Alexander Novak said in an interview, cited by Bloomberg, despite Novatek sending a force majeure notice to customers last week.
• LNG stockpiles held by Japanese power generators declined by 6.04% on the week to 2.49 million tons as of 24 December according to data released by the trade ministry.
• Turkey’s LNG imports rose to 1.47mn tons so far in December, up from 610,000 tons in November and the highest level since February according to S&P Commodity Insights.
• Australia’s LNG exports are set to fall in 2024 as increasing regulatory bureaucracy thwarts attempts to offset field declines.