European gas prices continued to rise on Friday, with TTF jumping more than 11% to the highest closing level since June amid low storage levels and cold weather forecasts, ING commodities experts Ewa Manthey and Warren Patterson noted.
Eurogas trades at a premium to Asian LNG
“European gas prices continued to rise on Friday. TTF settled higher by more than 11% on the day. The market settled at €36.88/MWh, the highest closing level since June. EU gas stocks are now only 50% full, well below the five-year average of 65% full.”
“At the same time, forecasts for colder than normal weather towards the end of January hold prices higher. We have been warning for some time about the risk of a sharp rise in short covering in the European gas market, given the record short position held by TTF funds heading into winter.”
“The rise in the European market has resulted in gas prices in the region trading at a premium to Asian LNG. This should attract additional LNG supplies to Europe, helping to alleviate some of the growing concerns about tightness.”
