For the first time since the end of June, the TTF is below €40 again. It is striking that an agreement between the unions and the Australian company Chevron barely reduced the price. After the announcement that Norway is ready to supply full volumes again, the gas price has taken a significant step down.
After last week's sharp peak, the gas price has fallen considerably. On Wednesday, October 27, gas traded for €39,30 per megawatt. The gas price rose until Friday, September 29. That day the TTF reached a level of €41,86 per megawatt hour. On Tuesday, November 3, gas traded at the lowest price in a month and a half, at a level of €37.
The drop in gas prices comes a little later than expected. Since mid-August, the gas market has been almost constantly under the spell of threatened strikes in the Australian LNG sector. The threat caused gas prices to rise from around €30 to mainly above €40, with peaks above €50. Last week, after Woodside, Chevron finally managed to reach an agreement with the unions. Analysts had expected that a deal would put a lot of pressure on the gas price, but in practice there appeared to be no decline.
The slight decrease is partly the result of disruptions to the American LNG grid. Last week, supplies from the largest LNG facility in the US, Sabine Pass, appeared to be declining. According to reporting from the Reuters news agency, there were additional disruptions at three facilities. Although the overall disruption is smaller than that in Australia, exports from the United States are more important to European gas supplies than Australian ones. The United States is Europe's main supplier of liquefied gas. Australia, on the other hand, sells almost exclusively LNG to the Asian market. There is therefore a risk that additional LNG from the European core markets will be purchased on the Asian markets. Australian disruptions can therefore at most mean that Europe can expect tougher competition for LNG purchases.
Norwegian maintenance comes to an end
In addition, maintenance that took longer than planned resulted in higher prices. This summer, a lot of planned and unplanned maintenance took place on the Norwegian gas network. At times the total Norwegian supply was virtually halved. The turnaround came on Monday, October 2. Gassco director Frode Leversund indicated in an interview on Sunday, October 1, that Norway is able to supply more gas in the short term. This provides a lot of relief to the European gas market, as Norway is the main supplier to member states of the European Union.
In addition, higher temperatures result in lower gas demand. Temperatures are relatively high throughout Northern Europe. In the Netherlands, contrary to previous expectations, temperatures of around 20 degrees are expected again during the weekend. The heating season usually starts around October 1, but this year it seems that most people will not have their heating on for a while.