The front of the TTF forward curve is being crushed in 2020. Lower gas prices are feeding directly through into lower power prices across European power markets. 4 key factors in play:
- A well supplied LNG market continues to send surplus cargos to Europe
- The European winter continues to be relatively mild
- European storage inventories are at record highs
- US Henry Hub prices are falling, pulling TTF lower as US shut in range support levels decline.
The chart shows another important dynamic happening in 2020: TTF forward prices are starting to fall across gas years 2020 and 2021. This reflects the market pricing in a more prolonged impact of oversupply in the LNG market.