Ing Natural Gas Prices Will Weaken

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Ing Natural Gas Prices Will Weaken

Ing - Natural Gas Prices Will Get Weaker

Commodity analyst at ING have recently shared their view about the natural gas prices in the European Union. According to them, the prices of natural gas will get weaker in the EU region in the near future.

If we look at the data, a 50kt WoW increase in the inventories of refined products for the ARA region. This happened due to a 120kt increase in the gasoline stocks.

Mild Weather To Drive Gas Demand Lower

Meanwhile, the inventories of gas/oil are around 2.47mt. These are comfortable levels given the current time of the year. Amidst all of this, it makes sense to think that the natural gas prices will experience some bearish pressure.

In fact, that's what we are seeing in the EU natural gas market already. This can be confirmed by the 1.26% decline in the TTF which is now under 45 per MWh.

In just this week, around 9% decline is seen which is a sign of high volatility in the market. Also, the weather in NW Europe will be mild in the coming weeks. So, that's also a solid reason why gas prices are under pressure.

Another thing to look at is the spread between the LNG prices in Europe and Asia. So, that's also something that makes the LNG an attractive market.

As of now, the EU storage is sitting around 68% which has declined from nearly 83% (based on the same date last year). In addition, this is also a lot lower than the 5Y average of around 74%.

With the weather getting milder along with attractive LNG prices, things are not looking that good for natural gas prices. So, it makes sense for the ING to be bearish about the natural gas prices in the EU in the short & medium term.

Also, the EU has taken measures to improve its reserves while consumer demand has gone down. Over all, the ING's forecast for weakness in the natural gas prices seems very reasonable.

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