Considered the benchmark for the Old Continent, the Dutch TTF rose 3.22%, ending at 48.303 euros per megawatt hour (MWh), also a high for more than a year.
The price of natural gas reached its highest level in a year in both the United States and Europe on Thursday, a movement due to different factors, weather conditions in the first case and geopolitics in the second. Around 9:00 p.m. GMT, the American gas futures contract for delivery in December gained 5.10%, to $3.356, a level unexplored since the beginning of November 2023. As for its European equivalent, the Dutch TTF, considered the benchmark for the Old Continent , it gained 3.22%, to finish at 48.303 euros per megawatt hour (MWh), also a high for more than a year.
On the American market, the movement was triggered, according to Masanori Odaka of Rystad Energy, by an update of the weather forecasts, which now predict temperatures below seasonal norms in the Western United States during the first week of December. Previously, the thermometer should fall in the Midwest next week. This sequence will mark a break with a very mild autumn, which depressed the consumption of natural gas, used in particular for heating. “We finally have some weather support,” noted Eli Rubin of EBW Analytics Group.
American production encouraged by tariffs
Stimulated by this development, the price of natural gas started to rise again and, in doing so, exceeded several technical thresholds. “Many speculators began to hedge” and return to buying after having long bet on a fall in prices, explains Eli Rubin.
“Now that prices are much higher, the market is waiting to see how production will react”, encouraged by more attractive prices, continues the analyst.
Larger volumes would automatically cause prices to fall again. However, with stocks already at historically high levels, the improvement in prices could only be short-lived if the weather becomes milder again, warns Eli Rubin. Unlike oil, natural gas is a very regionalized market, where prices and variations often differ significantly from one continent to another.
Geopolitical factors in Europe
The surge in the European TTF is due to the arrival of winter but above all to geopolitics. The Russian gas giant Gazprom notably interrupted its deliveries to Austria last weekend, which is still very dependent on this supplier, amid contractual disputes.
“There is also renewed tension between Russia and the West on a military level,” added Eli Rubin.
Russia launched a ballistic missile designed to carry nuclear warheads on Ukraine on Thursday, in response to Ukraine's use on Tuesday, for the first time on Russian territory, of long-range American missiles.
On the oil market, the price of a barrel of Brent from the North Sea for delivery in January ended up 1.95%, at $74.23. A barrel of American West Texas Intermediate (WTI) of the same maturity gained 1.96%, to $70.10.
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