Natural gas: Tight EU storage heightens winter volatility risk – ING

EU gas inventories have begun to fall from a peak just below 75%, and colder-than-usual weather in Northwest Europe could hasten withdrawals, according to ING’s Warren Patterson and Ewa Manthey. European natural gas prices climbed sharply late last week, with TTF closing near EUR104/MWh on Friday before edging lower. The analysts caution that tight gas supply and demand conditions over the winter could sustain high price volatility, giving weather conditions an increasingly significant role in driving the market.

Cold weather lends support to TTF

"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.)