According to ING analysts Warren Patterson and Ewa Manthey, investment funds have significantly increased their net long positions in TTF natural gas, with a rise of 26.7 TWh over the last reporting week, bringing the total to 181.9 TWh. This increase is primarily attributed to fresh long positions entering the market [1]. The analysts highlight that both LNG and European gas markets are currently vulnerable due to heightened hostilities between the US and Iran, as well as intensified competition between Europe and Asia for spot LNG cargoes [1].
The report notes that LNG supply disruptions and stronger power generation demand are making it increasingly challenging to refill EU gas storage ahead of the heating season. As of the latest data, EU gas storage is only 53% full, which is significantly below the five-year average of 68% and well short of the EU’s minimum target of 75% before the heating season begins [1].
These factors suggest that the European gas market faces considerable risks in the near term, with storage levels lagging historical norms and geopolitical tensions adding to supply uncertainty. The increased competition for LNG cargoes between Europe and Asia further complicates the outlook for European gas supplies [1].
CONCLUSION
The sharp increase in investment fund net longs in TTF natural gas reflects growing concerns over EU storage shortfalls and heightened LNG market risks. With storage levels well below target and geopolitical tensions impacting supply, the European gas market is likely to remain volatile in the lead-up to the heating season.