TTF gas prices surge as supply risks build ahead of winter

TTF gas prices surged by more than 10% on Monday as European markets reacted to mounting supply risks ahead of the winter heating season.

Greg Molnár, gas analyst at the International Energy Agency (IEA), highlighted the extension of the Ormen Lange outage in Norway to February 2027, which could remove more than 1 Bcm of gas supply during the European heating season.

He also pointed to continued geopolitical tensions around the Strait of Hormuz, a tight global LNG market and EU gas storage levels around 22% below their five-year average.

The combination leaves Europe needing to accelerate storage injections if inventories are to approach the 80–90% range ahead of winter.

Morten Frisch, an experienced gas strategist and negotiator, highlighted Germany as a particular concern. With European working gas storage inventories below their five-year average, Germany has decided not to refill its long-term storage facilities to normal winter levels, according to Frisch.

Instead, he points to Germany’s strategy of increasing utilisation of its LNG import capacity and purchasing additional spot LNG during peak winter periods and periods of Dunkelflaute — when low wind and solar generation increase reliance on dispatchable generation.

Frisch argues that this could prove a risky strategy, potentially pushing up gas prices not only in Germany but across Europe if additional German LNG demand emerges during an already tight winter market.

Norwegian supply could add another layer of pressure. Frisch notes that planned maintenance is expected to result in substantial Norwegian production and gas-system reductions during September, reaching around 75 million cubic metres per day on some days.

Taken together, the two perspectives underline the increasingly interconnected risks facing the European gas market: lower storage inventories, Norwegian supply constraints, greater dependence on LNG and the possibility of stronger spot purchasing just as winter demand begins to build.

Source: Greg Molnár and Morten Frisch, LinkedIn