Europe's main natural gas price benchmark is headed for multi-year highs despite the "energy ceasefire" reported between Russia and Ukraine over the weekend and improving Strait of Hormuz energy flows. Europe is heading into the Northern Hemisphere winter without Qatari LNG exports and with storage levels well below 15-year lows.
Dutch TTF futures trade around 83 euros per megawatt-hour, the highest level since early 2023. The September pullback to around 70 euros per megawatt-hour was short-lived.
"Even without Qatari LNG exports, Europe is injecting gas into storage at a faster-than-expected pace. European storage is over 73% full, despite earlier expectations of not getting to 70% before winter starts," Citi analyst Maggie Xueting Lin wrote in a note.
However, EU gas storage levels are still well below seasonal norms. The 15-year average sits around 90%.
In late August, when Dutch TTF futures traded around 67 euros per megawatt-hour, Goldman commodities expert Samantha Dart said prices would need to rise near 100 euros "to discourage Asia LNG demand, thereby freeing incremental cargoes to be sent to Europe to help manage European gas storage levels."
Citi's Lin identified three factors easing Europe's NatGas balance ahead of winter
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