Brief: Asia Natural Gas Regains Premium Over Europe As EU Storage Concerns Subside

Price action reflects the aftermath of hedge funds slashing long interest in Dutch TTF by more than 165 million contracts in the four weeks since TTF's mid-Feb rally

March 13, 2025 • Est. Reading Time: 4 minutes

Mobius Intel Brief:

Imminent supply concerns in the European gas market have faded in the four weeks since Dutch TTF rallied over $17/MMBtu as warmer weather, stronger renewable output, and more flexible storage regulations collided with hedge funds’ lopsided long interest.

Key Intel:

  • Asia Regains Premium: The April ‘25 JKM contract has regained a premium over TTF for the longest stretch of 2025 after hitting a peak discount of over $1.02/MMBtu on Feb 11. JKM’s premium over Apr ‘25 TTF narrowed from over $1.31/MMBtu last week to ~$0.29 at yesterday’s close. Front-month TTF traded in a range between $13.10 and $13.50/MMBtu this week.

  • Hedge Funds Pull Back: Money managers’ net futures and options interest in Dutch TTF collapsed by over 165.78 million contracts (-57%) in the four weeks since we outlined downside risks from multi-year-high spec positioning. Net interest fell by more than 48 million contracts in the seven days ending March 7 as hedge funds tacked on 48.6 million new short contracts. (Chart Below)

  • Latest EU Storage Data: Aggregate EU gas in storage has depleted by an average of 8.4 Bcf/d in March versus a Jan-Feb average of over 22 Bcf/d. Slower withdrawals have held the EU’s season-to-date withdrawal at -2,276 Bcf, making winter ‘24-’25 the fourth-largest seasonal depletion since 2011 after 2020, 2016, and 2017. Aggregate EU gas in storage dropped to 1,417 Bcf or 34.7% filled on March 11.

Looking Ahead

  • Emerging ceasefire talks between the U.S., Ukraine, and Russia will likely invite more spec-driven volatility this Spring as participants gauge EU officials’ willingness to resume purchases of Russian pipeline gas. Russia recaptured significant portions of the Kursk region over the past two weeks, regaining control of the Kursk pumping station that controls pipeline flows through Ukraine into Slovakia. Slovak officials are pushing the broader EU and Ukraine for a new gas transit agreement that could include Azerbaijani supplies.

  • The European Commission’s decision to ease gas storage mandates last week will likely ease near-term support for Dutch TTF while increasing upside skew for winter ‘25-’26.

This commentary contains our views and opinions and is based on information from sources we believe are reliable. This commentary is for informational purposes, should not be considered investment advice, and is not intended as an offer or solicitation with respect to the purchase and sale of commodity interests or to serve as the basis for one to decide to execute derivatives or other transactions. This commentary is exclusively intended for Mobius clients and is not considered promotional material.