Prices rise even as demand falls. Time for a correction? | EU LNG chart deck: 16-27 Oct 2023
European natural gas prices have retreated from recent peaks but remain unsustainably high. The initial shock of events in Israel and the Baltic Sea is giving way to a creeping realisation that gas fundamentals remain weak. European LNG imports have fallen by a third since the summer even as prices rose by the same proportion, suggesting a correction is due. But LNG traders can still make a killing before that happens.
The correction might be underway already. Prices on benchmark TTF fell more than 5% over the last fortnight and even further across the forward curve, eroding the contango that had until recently sustained talk of holding cargoes in floating storage to capture higher winter premiums (see Pushing the boat out — 18 Sept. 2023).