Mild Winter Could Drive Lower Prices but Supply Still Tight: LSEG

Mild temperatures this coming winter could drive European gas prices lower although the market is expected to remain volatile with tight supply according to the director of European gas research at LSEG via Montel.

• Above average temperatures in October and November increase the chance of bearishness said Wayne Bryan at LSEG.
• Once the risk of a cold winter started to abate, prices on the prompt could dip below 20€/MWh “but we need to clear December, January and February before we see any significant downside”, he said.
• Downside however would be limited as the global gas supply outlook remained tight, with the market susceptible to any potential supply interruptions, Bryan added.
• The market would remain volatile with recent price swings highlighting the overreliance on LNG to replace the lost Russian volumes.
• Colder conditions in both the Pacific and Atlantic basins simultaneously could see the competition for LNG between Europe and Asia “heat up”.
• Economic headwinds should continue to be a drag on demand with potential returning Chinese growth “the elephant in the room”.
  • TTF SEP 23 up 6.9% at 34.16€/MWh
  • TTF WIN 23 up 2% at 48.28€/MWh
  • TTF SUM 24 up 1.8% at 50.3€/MWh