FX.co ★ TTF Prices Rise to 10-Week High

European natural gas futures have surged to approximately €32 per megawatt-hour, marking the highest point since early November. This increase is attributed to a tightening in liquefied natural gas (LNG) supply and escalating geopolitical tensions. Tehran's warning to neighboring countries about potential targeting of US bases, should Washington interfere in ongoing protests, has heightened fears of possible energy flow disruptions. Such risks are particularly acute for Europe, which has become heavily dependent on LNG in the wake of losing the majority of its Russian pipeline gas supply. Notably, last year marked the first instance where LNG imports surpassed pipeline deliveries, amplifying Europe's vulnerability to global supply fluctuations. Furthermore, gas flow to significant US LNG export terminals is expected to decline to a two-month low as of Wednesday. Additionally, weather predictions suggest a return of cold conditions toward the end of January, likely increasing demand. Recent cold snaps have already accelerated storage drawdowns, resulting in EU gas inventories being about 53.2% full, significantly lower than the 65.8% recorded a year prior.