Europe's Winter Gas Uncertainty

Mild near-term weather offset by below-median LNG inventories and forecasts for a cold start to winter '24-'25

October 16, 2024 • Est. Reading Time: 3 minutes

Mobius Intel Brief:

BTU uncertainty remains a potent buffer for European gas markets, with near-term supply fears overshadowing >95% storage levels to limit Nov ‘24 Dutch TTF to -0.68% month-to-date versus Nov. ‘24 Henry Hub’s -18%.

Key Intel:

  • Front-month TTF has traded between $12.40 and $13.00/MMBTU in October, nearly 12% higher than mid-Sep, as Europe’s gas supplies faced consecutive threats from unplanned outages in Norway’s annual maintenance season and elevated Mideast tensions.

  • Immediate supply fears will likely ease, as real-time gas flows monitored by Mobius show exit noms from the Norwegian Continental Shelf have recovered within 1 Bcf/d from pre-maintenance levels. Recovering Norwegian gas flows will likely remove pressure from EU gas storage, which fell to an 82 Bcf Y/Y deficit this week from a 5 Bcf surplus in early Sep.

  • Europe’s winter ‘24-’25 supply availability retains moderate uncertainty. EU LNG inventories are below the 5YR seasonally adjusted median, and near-full gas storage levels cover less than a third of the EU’s typical winter consumption. While Mideast disruption risks to EU gas supplies are low, these fears contribute to ongoing competition with Asian buyers for LNG cargoes — both EU/NE Asia forecasts predict a cold start to Nov. heating season.

  • While the Dec. ‘24 expiration of the Ukraine/Gazprom gas transit agreement affects just 5% of European supplies, this additional unknown continues to support Dutch TTF across Cal ‘25 / winter ‘25-’26.

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