The Drill – Time to play the Natural Gas case again?

Dutch TTF is trading at its highest YTD price as supply is getting hit on various fronts. Firstly, as a consequence of the Houthis shenanigans in the Red Sea, Egypt has now become a net importer of LNG creating extra demand for potential European buying. Secondly, Norway has had to do unplanned maintenance on their pips towards Europe along with delayed LNG supply from the US due to weather. Add to that the Russia-Ukraine gas transit nears its end and will likely not be prolonged creating uncertainty. Remember, Europe still gets around 20% of its natural gas from Russia and a complete shutdown of that supply would be a massive disruption to European markets. Finally, winter is nearing here in Europe which just adds uncertainty even though the last two winters have been more wet than cold giving us a break in a very fragile market. So is it time to go long now and watch reality catch up to Habeck and all the other ‘Green fanatics’? Not so fast…
Chart 1.a: Will Egypt be calling on Trump to bomb the Houthis back to the stone age?
Natural Gas prices are back in the front seat once again with TTF rallying decently since the start of October. Is it bound to continue? We don’t think so.
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