The gas price rose sharply in October, but the TTF quotation is now stable. Due to the war in Israel, fears about disrupted LNG supplies persist, while supplies from Norway have fallen again. Meanwhile, warm weather and large LNG deliveries from the United States prevented too much of an increase.
The price of gas also remains fairly stable this week. On Wednesday, October 25, the TTF recorded the lowest price of the week, at €49,92. The next day the price was highest. On Thursday, October 26, gas traded for €50,81.
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In October, gas prices increased by 21%. The high level remains mainly due to the war in Israel. Due to the tensions in the Middle East, there is still fear that the conflict will spill over into the Strait of Hormuz. If that happens, it could become difficult for Qatar to ship LNG to Europe. In addition, the development of Norwegian gas exports still appears to be not going well. Although most maintenance has now been completed, the gas facilities at Nyhamna and Karsto are currently offline. Due to the disruptions, Norwegian gas exports will be approximately 12,5% lower in the next two weeks.
Eased circumstances
The fact that the price does not rise further is due to various extenuating circumstances. Normally the higher prices at this time of year are due to lower temperatures. However, at the moment the temperature is still mild. In October, temperatures were quickly 5 degrees above the long-term average and the trend is expected to continue in November. The result of the atypically warm autumn is that gas reserves are still growing. Last week, volumes in the Netherlands increased by 0,8% to 99,1%. This is approximately equal to the European average. The stocks of all countries are now close to 99% with a large stock. Even France has now caught up.
This success is not only due to the warm weather, but also to the large LNG exports. Currently, around 53% of all US LNG is exported to Europe. Due to delays around the Panama Canal, American companies are choosing to divert to Europe. As a result, European countries are currently receiving extra LNG. However, the situation is not expected to continue. Analysts predict that competition between the European and Asian markets will increase significantly. So far, that competition has not taken place, because temperatures in both Europe and China are currently on the high side.