Brief: TTF Spec Length Surges to Multi-Year High

Reactive supply fears boost prompt-month TTF to highest close of the year as EU gas inventories fall below 55% full before Feb 1

January 30, 2025 • Est. Reading Time: 4 minutes

Mobius Intel Brief:

The European gas market’s supply-side concerns propelled prompt-month TTF over $15.74/MMBtu today—its highest close in over a year— and raised TTF’s summer ‘25 premium over winter ‘25-’26 to $3.46/MMBtu (+6.6% MTD).

Key Intel

  • EU gas stocks have depleted at historically elevated rates despite above-average temperatures for most of December and January— a knock-on effect of Germany’s low wind generation placing additional demands on the bloc’s storage facilities. The EU’s Y/Y storage deficit widened to 620 Bcf this week from a 2 Bcf surplus in mid-September. Aggregate inventories are down to 2.14 tcf and trending towards 1.5 tcf for the end of withdrawal season.

  • Late Jan’s cold temps and recent forecasts for average/colder-than-average temperatures through mid-Feb have focused the market’s attention on the EU’s 2025 storage mandates. Regulators added intermediate targets of >50% full on Feb 1 and >30% on May 1 to ensure storage operators reach the EU’s mandated 90% storage target by November 1, 2025. With another 1.35 bcf/d of Russian pipeline gas severed by the expiration of the Ukraine-Gazprom transit agreement, these storage mandates have morphed into incremental tailwinds for TTF as inventories dwindled below 55% this week.

  • Supply-side uncertainty and inflexible mandates have fueled a meteoric jump in speculators’ TTF long interest. According to the latest ICE positioning data through Jan 24, TTF spec length gained to a multi-year high of over 490 MM contracts—a 68 MM increase from the final week of December— to raise net spec length to 278 MM contracts (+286 MM Y/Y). While an extended streak of cold temperatures remains a notable risk for EU storage levels, the opposite would leave little fundamental support for historically elevated spec length.

Looking Ahead

  • Germany faces a consequential Feb 23 election to determine who will form and lead a new government following the collapse of Chancellor Scholz’s ‘Traffic Light Coalition’ late last year.

  • Leading opposition candidates are strong proponents of adding new gas-fired generation and restarting Germany’s retired nuclear reactor fleet. An opposition victory alongside President Trump’s carrot/stick tariff threats will likely support the prioritization of US energy supplies in Germany and the broader EU over competitive cargoes from the Middle East.

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.