TTF to Fall on Norway Return and Lack of Cold: Goldman Sachs

TTF is expected to be pressured lower as Norwegian production returns, given elevated storage levels and with the lack of colder-than-average temperatures across NW Europe in the two-week forecast according to Goldman Sachs.

• Cash prices are likely to return to lignite switching economics in a 23-33€/MWh range.
• A decline in European storage congestion risk perception and repeated Norwegian outage extensions were the triggers of the recent short-covering rally. Winter tightness risk perception has not meaningfully changed with the rally focused on the October contract.
• Once near-term weather forecasts for winter months become clearer from mid October they expect TTF to be very much weather-dependent.
• With average winter weather, TTF can balance the market just above hard coal at 48€/MWh.