The Dutch TTF front month contract surpassed €60/MWh on Monday trade, an all-time high. Traders polled by ICIS believe that the contract is primed for bullishness moving forward, with implications for European power markets also suggesting price support.

By 11:00 London time the ICIS TTF front month had risen by €2.325/MWh on Friday’s settlement price to reach an intraday assessment level of €60.175/MWh. By the close at 16:30 London time, the contract settled at €61.313/MWh, a €3.463/MWh jump.

Several factors point to the contract’s continued support, according to traders.


One trader at a utility said that “prices will not drop any time soon, actually I can see everyone buy on W21 [Winter ’21] because they are all short on stocks.”

When discussing potential drivers, they pointed to announcement from German energy regulator BNetzA on 13 September, which indicated the Russia-Germany Nord Stream 2 pipeline link could take a further eight months to flow first gas.

“With a market so short, as soon as people hear something more certain about NS2 [Nord Stream 2] delays they just start buying,” they said.

However, another trader placed less weight on the Nord Stream 2 delays.


A key driver to front-month gains over 2021 so far has been high Asian spot LNG prices. On 13 September the ICIS East Asia Index (EAX) climbed to $20.30/MMBtu, largely driven by gains to European gas contracts and bullish weather fundamentals.

Comparatively, the ICIS TTF equivalent settled on Friday at $20.07/MMBtu.

One trader indicated that prices to both regions may easily continue to climb as a result of each other.

“Levels at this price are so detached from any physical fundamental, so it is just a vicious circle. Asian prices drive European prices which drive Asian prices, it is never going to end for as long as both regions need LNG,” they said.

Following the 13 September settlement, the ICIS TTF front month was assessed at $21.241/MMBtu.

Over the gas summer so far, high Asian prices have drawn substantial volumes of LNG from European shores, leaving continental storages well-below average levels ahead of the gas winter.

European sites currently hold 66.2bcm, down 5bcm on 2018 levels – the previous multi-year low – and 24.2bcm below the same point last year.

Low LNG moving into October could be particularly bullish as winter demand starts to set in.

European daily demand during September has averaged 828 million cubic metres (mcm)/day between 2014-2020.

However, October demand according to the 2014-2020 average jumps to 1078mcm/day.

Currently just 31 laden LNG cargoes are expected to berth in the UK, Netherlands, France, Spain and Italy over September, down more than 35% on the same month last year.

The combination of higher demand and low supply is leaving most traders confident that prices could remain bullish.

A trader active on the Italian gas market told ICIS that gas prices seem unlikely to decline any time soon, given expectations of a “nightmare winter” which could further boost prices.

“If it gets cold, it will be a mess,” the trader said.

Another trader said there was space for prices to climb, noting “I’m normally bearish in most cases but I can’t see how it’s going to come off without a major bit of news (or general commodity slump).”

One trader said Europe was well-priced for Qatari LNG to arrive, which could pressure gas contracts.


Another trader also said that increasing Russian supply could set things back.

The Ukrainian gas transmission system operator GTSO has offered 9.8mcm/day of firm capacity for October at the Sudzha interconnection point and 5.2mcm/day at the Sokhranivka IP on the border with Russia.

GTSO has been offering 15mcm/day of firm monthly capacity at the Sudzha border throughout the year.

GTSO decided to split it among the two border points.

The capacity, which has been offered on the Hungarian RBP platform will be auctioned on 20 September but some traders interviewed by ICIS were sceptical that Russia’s Gazprom may book it.

Last month, GTSO offered 15mcm/day for September but Gazprom had booked only 650,000 cubic metres/day.

Gazprom has a long-term ship-or-pay agreement with Ukraine’s Naftogaz to ship 40bcm/year via Ukraine until 2024. It is unclear whether it would abide by the terms of the contract once Nord Stream 2 enters commercial operation.