Europe gas and power markets short-term outlook Q3 2023
TTF prices are currently sitting close to 40 Euros/MWh - amid the threat of LNG supply loss in Australia due to strikes. However, Europe storage levels are over 93% at the end of August, and we anticipate they will reach 98% by the end of October 2023, with strike in Australia providing limited risk. Forward prices at contango for winter and over 2024, reflects global LNG market tightness and the risk of a cold winter. However, under normal weather conditions, we think prices will be lower and will reduce substantially in the summer, dragged down by reduced gas demand in the power sector - we forecast storage levels to reach above EU targets by the end of October 2024. In 2025, however, we anticipate a renewed market tightness, driven by lower Russian exports and still limited LNG supply availability.