TTF gas slumps to four-week low on mild weather, record stocks

Quantum Commodity Intelligence – European natural gas prices slumped to four-week lows on Monday as temperatures remain mild for the time of year, while supply fears have eased with stocks at record highs.

Benchmark TTF futures for Dec23 closed 6.7% lower on the day at just below €45/MWh, while the key winter contracts for Jan24 and Feb24 retreated by a similar percentage to around €47/MWh.

Temperatures remain above seasonal averages across most of Europe, while GasInfrastructure Europe put storage tanks at over 99% full, which is effectively at operational capacity.

As a result of relatively low demand and high inventories, day-ahead spot gas was also trading at steep discounts of at least 10% to front-line futures.

Prices also retreated after Israel resumed natural gas sales to Egypt after the conflict with Hamas disrupted flows last month.

The country has been exporting around 70% less gas since it shut the Chevron-operated Tamar field, but the east Mediterranean's largest gasfield - Leviathon – remains unaffected.

However, export volumes are expected to remain slim and geopolitical tensions likely to impact on volumes heading into the peak winter season.

"Natural gas is flowing from Israel to Egypt again, after initially being impacted by the war. Even so, Egypt's exports are projected to be significantly lower this winter than last year," said ANZ commodity strategist Daniel Hynes

Meanwhile, US natural gas were also under strong downward pressure amid record production levels and mild weather forecasts.

In early afternoon eastern time Monday, the Dec23 Henry Hub contract on NYMEX was trading $3.258/mmBtu, down over 7% since Friday's close.