FX.co ★ TTF Prices Jump on US-EU Supply Fears

European natural gas futures have experienced a significant increase, climbing over 12% to reach €39 per megawatt hour, marking the highest price since June 23. This spike comes as concerns over supply security grow, exacerbated by rising tensions between the US and the EU. Markets are worried that the US might use its LNG (liquefied natural gas) exports as a bargaining chip in the ongoing dispute regarding Greenland and trade issues—a credible threat given that the EU sourced 27% of its gas and LNG imports from the US by 2025, compared to just 6% in 2021. The situation was further complicated when the European Parliament decided to halt the ratification vote on a trade agreement with the US, following President Trump's threats of imposing tariffs on several European nations unless they consent to US ownership of Greenland. This development coincides with a period of tight supply, as US gas supplies are being redirected from LNG export facilities to cater to the surging domestic demand caused by an Arctic blast, while colder weather in Asia has intensified the competition for LNG cargoes. In Europe, gas storage levels have dropped to about 49.1% capacity, markedly lower than the 60.2% capacity recorded at the same time last year, with cooler temperatures expected to further drive up demand.