Euro TTF natural gas closes in on yearly highs, cold snap moves in
Quantum Commodity Intelligence – European natural gas prices were pushing 2024 highs Tuesday as the first cold snap of winter moves into northern Europe, raising expectations of below-seasonal temperatures.
Front-month Dec24 TTF futures were up around 0.5% on the session at €44/MWh late afternoon Tuesday, consolidating gains of around 12% since the start of the month.
This was both the highest level for front-month prices and the Dec24 contract this year, other than the brief spike during August.
A cold front is set to bring freezing temperatures across northern Europe later this week, lifting heating demand, while reduced generation from renewables will add to the call on gas-fired power supplies.
"Following an otherwise mild start to autumn in Northern and Western Europe, temperatures are now set to drop below average during this week, giving the first signs of winter," commented analysts at Energi Danmark.
"This will lead to increasing demand. In addition to this, spot prices are very high due to weak wind and solar power and the new Russian offensive against Ukraine added to the upside," added the report.
Further south, cooler air coming in from the Balkans will lower temperatures in the Adriatic regions and Northern Italy.
The European price rise dovetailed with the sharp rally in US natural gas prices at the start of the week, which was also largely weather-related.
Meanwhile, winter contract prices for North Asian LNG have also strengthened since the start of the month. Benchmark JKM LNG futures for Jan25 moved above the $14/mmBtu level on Monday, up from around $13/mmBtu early month.
