European gas prices rebound on lower supply
Front month TTF prices continued their downtrend over Q2 2023, hitting a floor at the beginning of June around €23/MWh. The downtrend was driven by depressed European gas demand and record Q2 European LNG imports, which helped maintain the healthy seasonal surplus in storage inventory levels. Prices have since rebounded as both Norwegian & LNG supply to Europe fell in June, in part on planned maintenances. On the curve, prompt prices moved higher in tandem, although it is expected that elevated European storage levels (limited room for injection) and continued weakness in European & Asian demand will subdue further upside over the balance of summer. The significant contango in the curve does though highlight the shift in risk this winter and into 2024, with a further tightening of European gas balances possible given limited new global supply, continued downside risk to Russian piped flows and uncertain demand evolution.