LNG

“Full exports from Arctic LNG 2 would crash the TTF,” Energy Aspects warns, arguing European gas markets would not be able to absorb the wave of additional supply without requiring US LNG shut-ins to balance.

Prices at the TTF, Europe’s most liquid gas trading hub, have eased amid expectations of a “swift comeback of Russian gas deliveries” as a Ukraine peace deal is in the making. "The Ukraine gas transit remains the most viable option for increasing pipeline flows from Russia to Europe,” analysts reckon, while TTF front-month prices shed some 14.6% week-on-week in a bearish market.

The TTF front-month future contract for March was last seen trading at $14.483 per MMBtu, down nearly 15% compared to a week earlier. The steep drop was caused by hopes among market participants for additional Russian pipeline gas following a phone call between US President Donald Trump and Russian President Vladimir Putin.

But despite narrowing summer-winter backwardation in the forward curve, Rystad’s senior analysts Christoph Halser calls for caution, suggesting "a swift return of Russian supply remains uncertain."

Taking a precautious stance, the EU Commission is rumoured to may publish revised, and likely more flexible, storage targets on 26 February which added to this week’s bearish momentum on gas markets. Amid bearish expectations, the backwardation in the forward curve between summer and winter narrowed. The difference between July 2025 and January 2026 delivery at the TTF was seen decline from $1.38 per MMBtu on 11 February to $0.81 per MMBtu at the end of last week.

Cold freeze pushes up Henry Hub price

Across the Atlantic, freezing temperatures in North America pushed Henry Hub prices to their highest level since late December 2022.” The return of winter saw Henry Hub front-month prices reaching $4.37 per MMBtu on 19 February, up 22.6% from the previous week. Extreme cold across large parts of the US East, Midwest and Mountain regions had pushed up gas demand for heating and electricity generation.

The cold snap also poses a risk of reducing production as regional well freeze-offs loom large. Dry gas production fell to 103.6 billion cubic feet per day (Bcf/d) at the start of the week, down from 106.7 Bcf/d in early February.

On the demand side, a 3.7% week-on-week uptick in feedgas further added to bullish momentum, reaching 16.17 Bcfd on 18 February, up from 15.6 Bcfd the previous week. This was primarily driven by the ramp-up of the Plaquemines LNG project and higher nominations at Sabine Pass.

Global LNG markets have been pretty unphased by last week’s US election results: near-term demand fundamentals are net bearish as traders await the onset of more severe winter weather. Looking at Q1-2025, uncertainty abounds with regards to Egypt’s LNG demand due to insufficient domestic gas production and escalating tensions in the Middle East.