Wider TTF Win-Sum Spread with Upside Risks to Winter

The gap between European summer and winter gas prices is widening as a sign of upside risks heading into the next heating season. There are enough concerns to justify an even wider gap between summer and winter gas, said Anders at Boston Group Consulting.

• Near term European gas prices remain weak suggesting the market is well supplied into the summer months with low demand and injection requirements eased by the high seasonal storage levels.
• “The winter premium is likely too low, dragged down by lower summer prices and very healthy storage levels, but with the risk of potential disruptions to pipe gas and adverse Asian demand the winter balance could be very tight, with significant upside to prices,” Porsborg-Smith said.
• Industrial demand in Europe improved last month with signs that consumption will increase as fertilizer and chemical companies are increasing activity.
• Potential cold weather next winter and increased LNG competition from Asia are an upside risk to prices later this year.
• EU continues to encourage consumers to limit consumption with the target of a 15% gas demand reduction in place until March.
  • TTF JUN 23 up 1% at 36€/MWh
  • TTF WIN 23 down -0.3% at 54.1€/MWh
  • TTF SUM 24 up 0% at 52.45€/MWh

Source: Bloomberg