TTF front-month gas price nears €30/MWh amid high inventories and strong LNG sendouts
The TTF front-month gas price closed at €31.8/MWh ($368/'000 m3) on May 16, continuing on a downward trajectory amid high inventories, strong LNG send-outs and sustained weak demand.
Imports at European regasification terminals remain high, as an expected recovery in demand in northeast Asia is yet to come about. Meanwhile, the gas storage reinjection season is well underway, with capacity utilisation now nearing 65% – an unusual high for the time of year. As of 06:25 GMT on May 17, the front-month price was down further at €31.75/MWh.
Europe has managed to overcome the loss of 80-85% over its Russian pipeline gas supply over the past year thanks to a warm winter, ample LNG supply, efforts to curb consumption and demand destruction. The focus has now moved to preparations for next winter, and the EU looks well-positioned to meet its target of filling storage facilities to 90% of capacity by the start of November.
Amid growing confidence that the worst of the energy crisis could be over, there are growing calls for Brussels to do more to eliminate Russian gas supply as part of its upcoming 11th sanctions package. Several member states have called for a ban on Russian LNG imports, which soared last year even as Russian pipeline supply was drastically cut. Spanish Energy Minister Teresa Ribera told Reuters on May 16 that the ban would "be coming sooner than later."
The European Commission's draft sanctions package will also reportedly include a restriction on the flow of Russian gas via pipelines that are no longer operational – namely the Yamal-Europe pipeline and the Nord Stream pipelines.