ING strategists Warren Patterson and Ewa Manthey report renewed strength in European gas, with TTF breaking above EUR50/MWh as Middle East risks persist. They argue the gas market is underpricing supply impacts from the Persian Gulf, expecting Asian buyers to increase spot purchases and compete with Europe, while EU storage remains relatively tight versus its five-year average.

TTF gains as supply risks grow

"The European gas market is seeing renewed strength with little sign of a resolution in the Middle East."

"TTF broke above EUR50/MWh and this strength is continuing in early-morning trading today."

"We have highlighted several times that the gas market is underpricing the scale of the supply impact from the Persian Gulf."

"Asian buyers will need to enter the spot market to replace disrupted contracted cargoes from the Persian Gulf, increasing competition between Asian and European buyers."

"Storage in the EU remains relatively tight at 36% full compared to a 5-year average of 50% full."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)