Asian LNG and TTF poised for decline after EC announcement on EU storage refilling, warmer weather, and strong supply; Henry Hub faces upside on tariff risks

Market & Trading Calls

European TTF price outlook: Bearish as the market digests the latest news on gas storage target flexibility outlined by the EC. Warmer temperatures, strong solar generation and plentiful LNG supply help provide bearish pressure.

Asian LNG price outlook: Bearish, driven by anticipated declines in European TTF, weak Northeast Asian demand, elevated inventory levels, and stable Pacific supply.

TTF-Asian LNG spread: Stable as both markets trend lower. As of 5 March, Asian LNG prices maintain a $0.72/MMBtu premium over TTF, with the spread narrowing by $0.08/MMBtu due to TTF rising more than Asian LNG over the past week.

US Henry Hub price outlook: Bullish as prices remain elevated due to risks associated with the US levying tariffs on Canada and underground storage levels now sitting well below the five-year average.

‍Key natural gas and LNG prices ($/MMBtu)

Source: ICE, NYMEX, Spark Commodities. Brent-indexed price represents 12% slope of 90-day moving average of Brent contract. Netforward USGC to NWE calculation is 115% Henry Hub contract plus shipping and regasification costs into Gate (Spark Commodities).

Asian LNG-TTF spread ($/MMBtu)

Source: ICE, Kpler Insight

US front-month arbitrage to Asia - Cape of Good Hope vs Panama Canal

Source: Spark Commodities, incorporating ICE-listed Spark Freight and Spark Cargo products. For a full M+12 forward curve and netback cost breakdown, contact Spark at info@sparkcommodities.com.

Europe: EC announcements on storage target flexibility, warm temperatures and strong solar generation to weigh on TTF prices

European TTF front-month prices fell last week, closing at $13/MMBtu on 5 March, up $0.3/MMBtu (2.4%) from 26 February. Prices rose on Thursday after the market interpreted that the European Commission's Clean Industrial Deal did not formally revise EU gas storage targets. Prices remained stable until Monday before declining on Tuesday, likely due to weather models shortening the duration of next week’s anticipated cold snap.

The downward trend accelerated on Tuesday after the European Commission released a document encouraging market participants to utilize existing flexibility within the current EU storage regulation and signaled that increased flexibility could be provided based on specific developments affecting gas markets and the refilling trajectories of Member States.

Kpler Insight expects TTF front-month prices to decline as bearish momentum builds around the European Commission guidance on gas storage targets and forecasts of above-average temperatures in NW Europe over the next five days. Strong solar generation and steady pipeline gas supply will further weigh on prices. However, upside risks persist, as Europe must maintain its premium market position to secure LNG cargoes. Additionally, any downward revision in temperature forecasts in the coming days could lend price support.

Norwegian gas flows to France continued to recover, with arrivals at Dunkerque increasing daily to reach 48 Msm3 on 06 March, while to St Fergus (UK) were virtually null (0.3 MSm3 on 06 March), amidst a continual narrowing of the NBP/PEG premium.

LNG supply was also bringing bearish pressure to the market, with strong feedgas levels for LNG in the US, and the ninth and final bloc of Plaquemines Phase 1 had finished ramping up.  The market was still awaiting the first full cargo from the GTA FLNG terminal in Senegal/Mauritania, which was likely to send cargoes to Europe in the short-term.

EU-27 weekly net pipeline gas imports (bcm)

Source: Kpler Insight. Data represents week commencing 19 and 26 February 2025.

EU-27 weekly net pipeline gas imports (bcm), y/y comparison

Source: Kpler Insight. Data represents week commencing 19 and 26 February 2025

EU-27 LNG imports slightly rose to 5.1 mcm last week (+2% w/w), with increases across all major buyers except Spain and Italy. The resumption of operations at the Alexandroupolis terminal in Greece was delayed again until late March, further limiting countries’ ability to secure additional volumes via LNG.

With the TTF-JKM narrowing and prices at lower levels, inter-basin competition could heighten in the next few weeks.

EU-27 weekly LNG imports (mcm)

Source: Kpler Insight. Data represents week commencing 12 and 19 February 2025.

On the demand side, weekly gas consumption from local distribution in 15 EU countries is estimated to have declined by 5% w/w to 3.22 bcm, extending the weekly losses observed last week. The decline was driven by the arrival of warmer temperatures in the CEE and SE regions in the aftermath of a cold snap that spread out in previous days.

For the upcoming week, the latest forecasts suggest temperatures remaining 2-3 degrees above average across Northern Europe until 11 March, likely reducing gas demand for heating.

EU-15 weekly consumption in the local distribution (res/com) sector (bcm)

Source: ENTSOG, ENAGAS, Eurstream, AGCM, Kpler Insight. The EU-15 perimeter includes AT, BE, CZE, FR, HU, GRE, ITA, NL, LUX, POL, POR, ROM, SLVN, SLVK, and SPA.

Average forecast temperatures for selected European countries (°C)

Source: Kpler Power. As of 06 March 00:00 UTC.

On the power side, EU-27 gas-fired generation increased by approximately 10% w/w to an estimated 8.33 TWh, driven by a decrease in onshore wind generation in the continent.

Looking ahead, gas-fired generation is expected to decrease next week due to warmer temperatures in NW Europe and strong solar generation.

EU-27 weekly gas-fired generation (TWh)

Source: Kpler Power, Kpler Insight

As of 04 March, EU-27 underground storage levels stood at 37.3% full. The pace of withdrawals slowed down in NW Europe due to warmer temperatures and higher Norwegian flows to France. However, the opposite is true for CEE and SE countries, where withdrawals have accelerated in February to meet increasing heating needs in the region and due to higher pipeline exports to Ukraine and Moldova.  

Higher temperatures for the next 7 days may slow the pace of withdrawal rates next week.

EU-27 daily underground storage net withdrawals since 1 November (bcm)

Source: GIE, Kpler Insight. Latest date as of 04/03/25.

Want the complete report?

The full report is available within Insight and contains:

• Asia: Prices Likely to Decline on Weaker TTF, Soft Demand, Ample Inventories, and Stable Supply
• US: Henry Hub prices to remain near $4.00/MMBtu due to tariff risks and robust storage withdrawals
• LNG Supply: Nigerian output to recover following vandalism, Qatar exports hold up despite maintenance season
• Key Indicators

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