TTF natural gas slumps 37% from peak, Gazprom backtracks on NS1 restart

Quantum Commodity Intelligence - European natural gas prices resumed the week's sharp downwards trend Friday, having paused in the previous session, after Russia initially looked set to resume gas supplies via the Nord Stream 1 pipeline over the weekend.

Dutch TTF futures for Oct22 slumped 11.66% on the day to close at €214.665/MWh, having earlier traded at a three-week low of €203/MWh

Last week the Oct22 contract reached a record high of €348.785/MWh on fears the Nord Stream maintenance would be used by Moscow as a prelude for ongoing Russian supply shortfalls.

At the same time, Nov22 and Dec22 winter contracts both closed around €223/MWh, having traded above €350/MWh last Friday, a reversal of around 37% from the peak and down over 10% on the day.  

NS1 shipment orders, published by the pipeline's operator Friday, indicated that flows will restart from 2am central European time on Saturday at a rate of 20% of normal capacity, the same level as before the three-day maintenance period.

However, Moscow threw a spanner in the works late on Friday after European gas markets had closed.

Gazprom backtracked saying it will keep Nord Stream 1 offline indefinitely, a move believed to be in retaliation after the G7 announced its price cap on Russian oil, although blamed an 'oil leak'.   

Prices had started falling this week after it was revealed gas reserves in the EU were filled to 79.4% as of end-August, compared with the target of 80% by 1 Nov, according to data from Gas Infrastructure Europe.

Goldman Sachs also cautioned that the TTF rally had overshot fundamentals.

The EU will also examine a price cap on gas and power for the peak winter months, while on Friday the G7 agreed to place a price cap on Russian crude starting 5 December and refined products two months later.