The Great Disconnect: day-ahead gas prices were trading at a record €75/MWh discount compared to the month-ahead contract on TTF last Friday.
In fact, day-ahead and month-ahead prices disconnected from
each other since the start of the new Gas Year, with the spread averaging at near €60/MWh.
Three factors are driving this:
1. High storage levels are providing downward pressure on spot prices, as injection rates are slowing down;
2. Unexpectedly mild weather is primarily influencing spot prices;
3. LNG send-out is strong despite weak demand fundamentals, as LNG deliveries typically follwo
+(1) The month-ahead and winter contracts include also a certain risk premium due to uncertainties on weather and potential supply cuts…
What is your view? how will prices evolve this winter? will spot and month-ahead reconnect?
Source: Greg Molnar (LinkedIn)