TTF gas prices have seen a sharp fall following a major rally through late winter, which had driven front-month prices to €58/MWh in February 2025. This rally exacerbated backwardation in the forward curve, deepening negative seasonal spreads and challenging intrinsic value for storage capacity, creating challenges for storage operators as some capacity auctions for the year ahead failed to clear in e.g. Germany in January 2025.
This price surge has since unwound amid warmer / windier weather in the continent, indication of European storage mandates relaxing, financial players liquidating gas positions amongst a broader sell-off across other global markets, and US announcements of tariffs. US Tariffs placed on Asian countries have created a deficit in gas demand within the industrial and manufacturing sectors, allowing European hubs to attract marginal LNG cargoes at much lower price levels. The cumulative effect of these has dragged TTF prices to lows of ~€33/MWh in April 2025.
The steep backwardation observed in February has flipped into contango across the forward curve as prices have fallen, restoring the usual price shape (cheaper in summer vs winter) and intrinsic value for gas storage capacity. This shift significantly improves the economics of summer injection (for sale in winter), a key concern for owners of seasonal storage capacity, and for Europe’s security of supply.
For more information on gas storage value and the factors that have been driving gas prices recently, or for any more information on our services, please contact David Duncan (Director, LNG & Gas) at david.duncan@timera-energy.com.
Ellen Doherty (Senior Analyst) and Luke Cottell (Associate Director) will be attending FLAME over 13th-15th May 2025. Please contact Ellen at ellen.doherty@timera-energy.com if you would like to catch up on the services Timera Energy provide, LNG Bridge, our quarterly Global Gas Service or anything else.
