Natural gas: Is tight EU storage raising winter volatility risk? – ING

European natural gas prices rallied towards the end of last week before easing modestly, with ING’s Warren Patterson and Ewa Manthey highlighting Friday’s TTF settlement near EUR104/MWh. With EU inventories already falling from a peak just below 75%, colder-than-usual conditions in Northwest Europe could quicken withdrawals from gas storage. A tight gas balance over the winter could sustain pronounced price volatility, the analysts warn, leaving weather conditions with an increasingly significant role in driving the market.

Can cold weather keep TTF supported?

"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.)