Rising speculators on European gas.
Over the past week, portfolio managers have increased their bullish bets on benchmark European natural gas futures as supply concerns have mounted with a potential strike at Australian LNG export facilities, adding to flow disruptions from the Norway, where some of the gas infrastructure is under maintenance.
The fund managers' position in European natural gas futures turned into a net long – the difference between bullish and bearish bets – for the first time this year and for the first time since October 2022, according to weekly data from Intercontinental Exchange quoted by Bloomberg on Wednesday.
Long positions have surged over the past week, while short positions have plunged more than 20%, data shows.
Investors have not been so optimistic about natural gas prices in Europe all year. The latest supply threat has increased volatility after a period of several months of trading lull .
Australia's potential strike on wages and conditions could hit a tenth of global LNG. The threat of a strike has sent prices soaring in Europe in recent days, once again highlighting Europe's difficult energy security position. Benchmark gas prices in Europe jumped 40% last week as the workers union threatened to strike.
Futures for the first month at the TTF hub, the benchmark for European gas, traded at 38.62 euros per megawatt-hour (MWh) at 13:24. GMT Wednesday, down slightly 0.5% over the day. The price is over $10.91 (€10) per MWh higher than just two weeks ago, despite the fact that EU gas storage sites are now 90% full, meeting the EU's target. EU two and a half months before the 1 November deadline.
“It appears that European storage will be substantially full before the start of the next heating season and so we would expect to see renewed downward pressure on prices, particularly once there is some clarity in Australia,” the strategists of ING Warren Patterson and Ewa Manthey said Wednesday.
At this point, in order to have a truly peaceful winter, it would be necessary to have an additional source of supply, which prevents a crisis at the first unexpected moment. Too bad it's not there for now.
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The article Rising speculators on European gas. comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/speculatori-al-rialzo-sul-ga-europeo/ on Thu, 17 Aug 2023 06:00:20 +0000.