Natural Gas (TTF)

January 22, 2021

The Research Team reviews the Natural Gas (TTF) market.


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21 January 2021

  • The supply conditions continue to be very tight, with new record lows observed in 2021. LNG volumes are scratching the surface for NW Europe with virtually no LNG cargos from North America in more than a month. Moreover, the pipeline flows are also weak. We are observing a substantial YoY deficit over NW Europe, and while the Russian volumes are comparable with those recorded at the beginning of 2020, they still exhibit a 30% deficit relative to 2019. As a result, storage has been dropping very quickly – it is now below 60% capacity when last year, at the same time, it was floating at around 80% or slightly below (see also the “thought of the week”).
  • The short-term demand is expected to be on a weak side. Temperatures will range from around to above average for most of NW Europe for the next 10 days or so. At the same time, winds will trend stronger than what we have been seeing for the first half of the winter, providing an additional source for power generation. The switch from gas to coal has also been more aggressive in recent times, aided by a more favourable climate spread.
  • The macro section closed 2020 on a positive note, with both the PMI and the Business expectation indices on a slight rise relative to November. For the short-term, the Energy Intensity index (i.e. energy efficiency normalized by the GDP) is associated with a downward trend, which may however be limited to the second half of January.



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