TTF Extends Decline on Easing Early Winter Concerns

TTF front month extends the decline driven by low demand from the lack of cold temperatures in the weather forecast and high storage levels over 95% while extended Norwegian outages are limiting the downside moves.

• The first half of October looks set for mild temperatures to help ease any concerns for high gas demand early in the winter season. Higher solar and wind power generation are also helping limit gas demand. Spain and Portugal, much of France, southern Germany, and Italy are all expecting plenty of sunshine according to AccuWeather while northern Europe is expected higher wind generation.
• Rising LNG volumes at sea are also helping reduce early winter supply risks as cargoes delay deliveries until higher priced periods.
• TTF aggregate futures traded volumes have been strong this week averaging 294k compared to the Sep average so far of 248k. Yesterday saw 276k of futures contracts traded.
• European gas market price swings remain high although historic volatility has eased lower during the month. The 30 day front month historic volatility is down from a peak of 145% at the start of September to 112% but is still high compared to pre energy crisis normals.
• The reducing risk to early winter supply has helped ease tight market concerns with the Q1 2024 premium to the Oct23 contract falling to just 7.53€/MWh before the near term contract expiry yesterday. The Win23-Win24 spread has however remained relatively unchanged this week at around 4.5€/MWh today.
  • TTF NOV 23 down -4% at 41.38€/MWh
  • TTF Q1 24 down -1.8% at 47.18€/MWh
  • TTF SUM 24 down -0.9% at 46€/MWh
  • TTF WIN 24 down -0.4% at 50.05€/MWh