FX.co ★ TTF Prices Fall for 2nd Session

European natural gas futures dropped by 3.6% to approximately €32.1 per megawatt hour on Tuesday, continuing a 15.1% decline from the previous session and distancing further from the seven-month high of €40 achieved on January 23. The dip is attributed to eased concerns over LNG supply. The short-term weather outlook in the US has shifted to milder conditions, diminishing heating demand and allowing more gas availability for LNG exports. This development has improved the forecast for European deliveries, as the continent has become heavily reliant on LNG, covering about half of its gas requirements, following the reduction of Russian pipeline supplies. By 2025, the US is projected to provide around 27% of the EU’s gas and LNG imports, making European gas prices particularly susceptible to US supply dynamics. Additionally, geopolitical risk premiums have decreased after President Donald Trump's announcement of ongoing talks with Iran, alleviating fears of disruptions to LNG and oil shipments through the Strait of Hormuz. Nevertheless, EU gas storage levels remain critically low at just 41.1% capacity, significantly below last year’s figures and the five-year average, leaving the market susceptible to sudden cold spells or supply disturbances.