Who let the bears out? TTF prices dropped by over 15% since the start of Dec to below $12.5/mmbtu – their lowest level since the beginning of the heating season.
Following the strong bull run through November, European gas prices have been loosing steam in recent weeks, with TTF prices plunging by more than 15%.
There are several factors contributing to this downward revision:
(1) US LNG ramp-up: both Plaquemines LNG in Louisiana and Corpus Christi LNG stage 3 are ramping up operations, which is naturally improving supply side fundamentals and weighing on gas prices;
(2) Ukraine transit: recent comments by European piped gas importers are giving the impression that an agreement could be reached, although the future of transit remain uncertain. news and rumours will be a key price swing drivers in the coming months:
(3) Better weather: milder temperatures and improving wind speeds are weighing on gas demand and consequently on European hub prices;
(4) Asian blues: gas demand in key Asian markets have softened in recent weeks, partly due to high spot prices through Oct-Nov;
What is your view? How will European gas prices evolve through the winter? Is it time for the bulls to wake up? Do you see any bullish factors?
Source: Greg MOLNAR
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