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TTF Extends Decline amid Muted European Demand

NATURAL GAS

TTF extends the earlier decline to the lowest since early Oct with muted demand and healthy near term supply helping to ease winter supply risks.

  • Overall European gas consumption is set to fall 6-7% in 2023 with a 14-17% drop in gas demand for electricity generation according to Bloomberg. Gas demand for generation could fall by another 4-5% next year with a rise in nuclear and assuming normal hydro reservoir levels.
  • Renewable capacity expansion including wind and solar may add to the longer term decline in fossil fuel consumption. Capacity expansion of 60-65GW a year in 2023-34 could displace annual gas and coal generation of about 100TWh according to Bloomberg.
  • The TTF Dec23 - Q1 2024 spread is holding steady around -1.1€/MWh today but Q1 2024 -Q1 2025 has widened to -3.9€/MWh and Sum24-Win24 to -3.9€/MWh.
    • TTF DEC 23 down -4.2% at 42.12€/MWh
    • TTF Q1 24 down -4.1% at 43.25€/MWh
    • TTF SUM 24 down -3.5% at 42.53€/MWh
    • TTF WIN 24 down -3% at 46.43€/MWh

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