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Structural Changes Supporting Higher TTF Volatility: IEA

NATURAL GAS

TTF price volatility has been almost three times the historic average through 2023 reflecting a fragile global and European gas balance and tight supply fundamentals as well as structural changes according to IEA.

  • Rising volatility is “an enabling factor for the gas system to react to an increasingly complex and interconnected global energy system.”
  • European prices are more sensitive to a broader range of factors impacting global supply-demand with LNG the new baseload of European gas supply.
  • Volatility is also supported by the variability of gas demand due to a rising share of variable renewables with an increasing role of gas-fired generation in providing back-up to a power system.
  • The TTF hub is reacting to financialization of the gas market amid growing liquidity from more hedging and increasingly sophisticated risk-management strategies.


Source: IEA

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