Natural gas: Winter volatility risk builds with tight EU storage – ING

ING’s Warren Patterson and Ewa Manthey note that European natural gas prices rose sharply at the end of last week, with TTF settling near EUR104/MWh on Friday before easing slightly. Colder-than-usual weather in Northwest Europe could accelerate gas storage withdrawals, with EU inventories already declining from a peak just below 75%. The analysts warn that a tight winter gas balance could keep prices highly volatile, making weather conditions an increasingly important market driver.

TTF supported by cold weather

"European gas prices saw significant strength at the end of last week, with TTF settling more than 6% higher on Friday, near EUR104/MWh. Prices eased slightly in early morning trading today."

"Weather forecasts for NW Europe show colder-than-usual weather this week, leading to potentially large storage draws. EU gas storage peaked at just under 75% last Tuesday and has been edging lower since, suggesting the heating season is now underway."

"With a tight balance through the winter, the market is likely to remain extremely volatile, and weather will prove to be even more important than usual."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)