What’s happening? TTF prices have risen dramatically over recent months to levels not seen since 2008, firstly on a prolonged winter and strong demand that have driven storage stocks to the bottom of the historic range, and more recently on tightening pipeline and LNG supply. In addition, the market is now struggling to price gas out of the power sector as the coal-switching price rallies to new record highs.

 

 

What’s next? S&P Global Platts Analytics’ view is that currently TTF and JKM prices above $11/MMBtu and $13/MMBtu respectively are not justified. Risks remain that could drive Platts Analytics’ forecast for TTF and JKM even higher, but to surpass levels already priced in by the market we would need to see multiple major bullish factors align, including Gazprom’s continued aversion to booking Ukrainian interruptible capacity. Russian flows in July will drop considerably on maintenance works at gas entry routes Yamal and Nord Stream, scheduled July 6-10 and July 13-23, cutting 78 million cu m/d and 158 million cu m/d respectively based on current flows.

Resource: spglobal.com