The European gas market has found a certain balance. The storage facilities are well stocked for this time of year and the American LNG exporters are noticing this. In addition, the supply of gas from Norway is running smoothly.
The quotation of natural gas on the TTF was reasonably stable last week. The market seems to have found a balance just below €30 per MWh. The gas price is therefore a lot lower than a year ago when the TTF was around €200 and even rose to above €300 per MWh at the end of August. If we compare the current price with the period before the Russian invasion of Ukraine, €30 per MWh is still expensive. Gas prices well below €10 per MWh in the summer period are probably behind us.
Norway has filled the gap left when Russian gas was no longer supplied to the EU. About a quarter of the EU's gas demand is met by the Scandinavian country. It is therefore not surprising that planned and unplanned maintenance in July, which resulted in less gas being transported, caused price fluctuations on the TTF. Now that the work has largely been completed, the gas market is entering calmer waters.
Shifts in LNG
What of course also contributes to stability on the market is sufficient stock. The filling level of European storages is approximately 85%, which is relatively high for this time of year. The fact that Europe has already captured a lot of gas is clearly reflected in the LNG export figures from the US. In July, America exported 7,44 million tons of LNG, according to Refinitiv data. Of those total exports, 43% went to Europe and 36% to Asia. By comparison, in June 52% of US LNG went to Europe and 20% to Asia. Europe imported the smallest amount of LNG from the US last July, while exports to Asia rose to the highest level in eighteen months. On balance, American exports therefore remained at the same level
Europe and Asia have quite different purchasing strategies according to some analysts. Europe still has fresh memories of the highly volatile market of the last two years and is a buyer anyway. Everything to prevent us from running out of gas. Asian buyers are taking a somewhat wait-and-see attitude and will only make their move if spot prices for LNG show a dip. Please note: a small dip. It only concerns cents to at most dollars per mmBTU for LNG on the spot market. India in particular only buys when it is affordable. Several countries in Asia also have that luxury because they already have a reasonable basis with permanent long-term contracts. The EU also had long-term gas agreements, but Russia was the main supplier. And of course that turned out differently than we had anticipated.