This month has witnessed, among other things, lower TTF prices as compared to other major European hubs for the first time since July 2020.
What is standing behind it?
On the one hand, it is the increase in gas supply to the TTF market area. Along with more volumes coming from the Dutch fields amid a cold outbreak, NL has resumed regular LNG imports in Feb, in contrast to the previous two months. As of 19 Feb, the Gate terminal sendout was more than 10 times higher the figure for Jan.
But the fundamentals of the Dutch market only partly explain the development. When it comes to TTF vs. VTPA, it is the weather in Italy that has made the difference. The strong demand for gas, owing to colder temperatures and limited wind power generation in mid-Feb, supported PSV, which resulted not only in wider spread between the Italian hub and NWE, but also in the return of a long-forgotten premium at the Austrian trading point over TTF.
Those same two factors – the dynamics of LNG imports to NL (and, more broadly, to NWE) and Italy’s need for additional volumes – are likely to remain the crucial ones for defining the movements of TTF prompt prices relative to DE and AT, at least in the short term.
Source: Yakov Grabar
See original post by Yakov at LinkedIn.