TTF pricing in longer LNG supply surplus

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:

  1. A well supplied LNG market continues to send surplus cargos to Europe
  2. The European winter continues to be relatively mild
  3. European storage inventories are at record highs
  4. 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.