TTF gas prices slump 10% as mild weather delays heating demand  

Quantum Commodity Intelligence – European natural gas prices rowed back sharply Monday as unseasonally warm temperatures across much of the continent deferred the onset of winter heating demand heading into the second half of October.

Benchmark TTF futures for Nov23 in late Monday trade were down by around 10% on the session at just shy of €48.50/MWh, surrendering some of the gains after prices soared around 50% last week following a number of supply disruptions.

Prices spiked last week after Israel ordered the closure of the Chevron-operated 10 billion-plus cubic metre/year Tamar gas field for safety reasons, which supplies not only Israel but also Egypt and Jordan.

Northern Europe was hit by the shutdown of the 77-kilometre undersea Balticconnector gas pipeline, which links Finland and Estonia.

Meanwhile, workers at Chevron's LNG Gorgon and Wheatstone plants voted to resume strike action starting later this week after accusing the energy giant of reneging on an in-principle deal from last month.

The supply disruptions come ahead of the crucial winter season, with Europe highly reliant on LNG and facing a second winter with sharply reduced supplies of Russian pipeline gas.

However, The latest data published by Gasinfrastructure Europe calculated gas storage facilities at around 97% of capacity, well ahead of the 90% EU target by the end of October.

This effectively puts Europe at operational capacity, so continued mild weather in October means there is no tank space to further top up inventories via LNG shipments, with both domestic and industrial demand running well below seasonal norms.

Earlier this year, Morgan Stanley cautioned over a potential 'tank tops' scenario in the event of a mild fourth quarter, forcing LNG imports to be kept on the water once landed storage effectively reaches operational capacity.