European gas prices have risen as colder weather increases demand, causing faster storage withdrawals. The EU gas storage level has decreased to 58%, compared to a five-year average of 72%.
Investment funds have reduced their net short positions in TTF for three consecutive weeks due to this colder weather. This week, funds purchased 6.2TWh, remaining with a net short of 72.4TWh.
Experts at ING note the easing of downside pressure on TTF amidst these market changes.
The current cold snap across Europe is tightening the gas market significantly. With storage levels now at 58%, well below the five-year average of 72%, we see upward pressure building on TTF prices. This suggests that positioning for higher prices in the coming weeks could be a prudent move.
We believe traders should look at buying front-month TTF futures contracts to capitalize on this short-term trend. Alternatively, purchasing call options offers a way to gain upside exposure while limiting downside risk if the weather suddenly turns mild. The reduction in net short positions by funds for three straight weeks signals that big players are already moving in this direction.
Recent data from Gas Infrastructure Europe shows daily storage withdrawals have accelerated to over 3.5 TWh, a rate not seen since the cold spells of last winter in early 2025. While LNG imports into Northwest Europe remain robust, averaging near 12 billion cubic feet per day, it is not enough to offset the heavy demand from this cold. These strong withdrawals are rapidly eroding the supply cushion we had built up last autumn.
This situation is a notable shift from the market focus we observed through much of 2024 and 2025, which was centered on rebuilding inventories after the crisis earlier in the decade. The current supply-demand balance is much tighter, making the market highly sensitive to any further bullish news, such as extended cold forecasts or unplanned outages. We are now in a weather-driven market where short-term volatility is likely to increase.
