European TTF gas trades below €65/MWh amid record January temperatures
Quantum Commodity Intelligence - European natural gas prices Wednesday traded below €65/MWh for the first time in more than a year as exceptionally mild winter temperatures across the continent continued to crush demand and preserve inventories.
TTF prices for front month Feb23 slumped to a low of €64/MWh at one point, versus the previous settlement of €72/MWh, although edged up to around €65/MWh by the close.
"Selling pressure is being generated by the unusually mild winter temperatures in much of Europe, which are predicted to continue until the end of next week. The demand for heating is therefore likely to remain muted," said Carsten Fritsch of Commerzbank, commenting on spot price levels that were last seen in 2021.
Temperatures for January have reached an all-time high in a number of nations across Europe, according to a BBC roundup of the unusually mild weather conditions.
National records have fallen in eight countries - and regional records in another three.
Warsaw, Poland, saw 18.9C (66F) on Sunday, while Bilbao in Spain was 25.1C – more than 10C above average.
The mercury also hit record highs for January in the Netherlands, Liechtenstein, Lithuania, Latvia, Czech Republic, Poland, Denmark and Belarus. Station records were also broken in Germany, France and Ukraine.
The temperature recorded in Warsaw on 1 January was 4C higher than the previous record for the month, and Belarus' record high was 16.4C, some 4.5C above the previous record.
Inventories
The spring-like weather is also helping to preserve gas inventories in the event of a further cold snap in the next two months after Europe comfortably passed the first cold test in the first half of December.
According to data from Gas Infrastructure Europe (GIE), the filling level of German gas stocks increased counter-seasonally in the last few days of December to 90% again on the back of the warmer-than-average weather.
EU-wide, the filling level increased, albeit only marginally, to a healthy 83%, reducing the risk of a gas shortage at the end of the winter.
"At the same time, it improves the chances that gas stocks at the end of the winter will also be at a level that will allow them to be replenished in time for next winter even without Russian pipeline gas supplies," said Commerzbank's Fritsch.
Meanwhile, Germany has received its first standard shipment of LNG to one of its newly built terminals on the North Sea, arriving at Wilhelmshaven on Tuesday.
The facility is one of several that were set up to allow for the replacement of Russian gas that had previously been flowing into Germany via pipelines.
Environmental activists said they would protest the ship's arrival, arguing that Germany should not be importing fossil fuels, especially not gas acquired through fracking, reported Germany's DW news service.
