TTF Pulls Back as High Storage Levels Cover Heating Demand

European gas is falling back after rallying 8% yesterday on increased heating demand with below normal temperatures expected this week and LNG supply risks with the potential for higher Asian demand.

• TTF FEB 23 down -6.1% at 56.39€/MWh
• TTF SUM 23 down -5.5% at 58.83€/MWh
• TTF WIN 23 down -3.7% at 66.25€/MWh
• The cold weather is forecast to be short lived with temperatures in NW Europe recovering back to normal next week.
• A recovery in Chinese LNG demand could put pressure on European prices with LNG supplies drawn away from Europe to Asia. LNG supplies have remained stable around 400mcm/d so far this year although gas spreads still favour spot cargo diversions. Weak Asia demand and high inventories have limited the draw away from Europe so far this year.
• High gas storage levels are limiting any upside moves with stocks now above the five year range for this time of year. The latest GIE data is showing European storage 81.07% full as of 16 Jan.
• Ukraine transit gas flows are today at 32.6mcm/d and Norwegian supplies are today down to 319.6mcm/d with planned outages this month reducing supplies slightly.