Halfway to reality
TTF has swallowed more of the Hormuz closure risk. Beneath the latest peace sell-off, funds have banked profits and made room to buy again.
Peace talk moved gas prices once again this week. The hopium dose was homeopathic: Donald Trump told Fox he would “probably be open” to meeting Iran’s president. Dutch TTF, the EU gas benchmark, duly fell 8% on Monday to €73/MWh, helped by warmer forecasts, improved Norwegian gas supply, and indications of Ukrainian gas leaving storge.
By Thursday it was back at €75/MWh, from €72 at Wednesday’s close. The market still reacts to reopening talk, but every time a little less dramatically. Hormuz is now an “interruptible” waterway, as Wood Mackenzie’s Simon Flowers put it. A peace headline cannot make it dependable.
Odds on for a long closure
Goldman Sachs sees TTF at €105/MWh by year-end if Middle East LNG exports show no meaningful winter recovery. Use that as the prolonged-closure price in our Quantum Transits model, alongside the default €35 for a durable reopening, and Thursday’s settlement implies a 57% closure probability. On the same assumptions, late May’s reading was just 18%.
These are scenario-implied odds, not a forecast: change either price and the answer changes. The direction of travel is harder to dismiss. In the week to 22 September, just three laden LNG cargoes left the Gulf, roughly 15% of pre-war flow.
In May we wrote: “Either missing cargoes return, or TTF moves higher.” The cargoes have not returned in force; TTF has climbed from €47 to €75. Reality is dawning, one peace sell-off and upward correction at a time.
Paid subscribers can explore the Quantum Transits model with their own price assumptions. It is now updated weekly with the latest Hormuz crossings data, alongside the Risk Spine and Risk Cube.
Beneath the sell-off
This week’s Chart Deck follows the buyers beneath the headlines:
- Funds have sold into a rising market. How much room have they created to buy again, and who has absorbed the selling?
- Options now account for more than half of fund net length. Expiry could make next week’s positioning report deceptive.
- Asia’s freight hurdle and Europe’s storage shortfall: Why neither offers much winter comfort.
The 139-slide deck includes eight new charts, refreshed gas benchmarks monitoring, and enhanced charting throughout. Download it in PDF or PPSX below.
Below the paywall: the full picture on fund positioning and the options split, the storage sprint and how freight moves the arb, plus the Chart Deck itself: 139 slides, PDF and PPSX downloads.
Paid subscribers:
Download this week’s Chart Deck
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