TTF Prices Rise to Near 2-Week High

European natural gas prices rose above €76MWh, their highest level in over two weeks, as ongoing security risks around the Strait of Hormuz continued to threaten LNG flows from the Persian Gulf. The waterway, which handled roughly a fifth of global oil and LNG trade before the war, has seen attacks on vessels in recent weeks, raising concerns over the security and reliability of shipping. Although outbound traffic in September reached its highest level since the war began in late February, LNG flows remain over 75% below pre-war levels. In addition, QatarEnergy recently extended force majeure on LNG deliveries to Italy’s Edison through December. Europe is racing to replenish reserves ahead of winter, with gas storage levels at around 72% of capacity, well below the five-year seasonal average of 87%. With inventories lagging seasonal norms, any prolonged disruptions or a colder-than-expected start to the heating season could further tighten the market and drive prices higher.

European natural gas prices staged a sharp afternoon recovery on Friday, reversing earlier losses to trade nearly 3% higher at around €75.80 per megawatt-hour. Prices had opened near €72/MWh before turning upward, as renewed concerns over supply security prompted traders to increase positions ahead of the weekend. Market attention remained focused on potential disruptions to energy shipments through the Strait of Hormuz and continuing uncertainty over deliveries from Qatar. QatarEnergy’s extended force majeure on certain European LNG supplies, covering shipments into late in the fourth quarter, added to concerns about the availability of imported gas. The market is also facing the challenge of replenishing inventories before winter, with European storage facilities around 71% full, significantly below the five-year seasonal average of 87%.

European natural gas prices fell below €72/MWh on Friday, snapping a two-day advance, as softer Asian LNG demand and higher US supplies offered some relief to the European market. US LNG exports rose to 10.9 million tonnes in September, with Europe receiving 5.91 million tonnes, or 54% of total shipments, as buyers refilled inventories ahead of winter. Meanwhile, weaker Chinese LNG demand could free up additional cargoes for Europe, easing competition for spot supplies. Still, EU gas storage is around 71% full, below the five-year seasonal average of 87%, while Germany’s inventories are just above 57%. QatarEnergy has extended force majeure on LNG deliveries to Italy’s Edison until December, while some Qatar-linked LNG vessels have resumed transits through the Strait of Hormuz in recent weeks. Low storage levels leave Europe more exposed to disruptions, as the prospect of renewed US military action against Iran raises concerns over flows through the key shipping route.