Netherlands: TTF prices soften further amid a bearish sentiment
On Friday, the market closed the week on a bearish note - marking another step in the softening trend. The move was put down to sentiment, mainly, as prices weakened despite a lack of bearish signals from other commodities or supply sources, with the exception of warming weather.
While many market participants were away from their desks attending an industry event, the market was described by one remaining trader as "still quite active, even though the market was short in traders".
Over the last couple of sessions, gas prices - particularly on the curve - had been linked to price movements elsewhere in the energy complex, most notably coal and German power. Today, however, traders registered surprise as gas ignored the movement of both commodities. While coal went up and the German power curve remained range-bound, gas continued to soften.
"We need to see what happens now, the spreads are widening, which presents a good opportunity to sell coal and buy gas," the trader commented. "As a result, the coal-gas spread is looking better now than it has in the past month, so we might see some support from that," he added. However, he noted that since many traders had not been in, this dynamic may only develop on Monday.
Despite Norwegian flows to the UK being low, usually a bullish signal, prices continued to come off as the system remained long. The trader noted that this failure to react to supply problems showed that a bearish sentiment prevailed at the TTF.
Between 28 January and 1 February, according to Weather Services International (WSI), temperatures in most of the Netherlands are expected to be just below seasonal averages. In the second half of the week, however, temperatures are expected to become milder and reduce temperature-led demand, which is expected to depress the prompt.
German power - which, along with coal, has proven a strong driver for both the Dutch and German gas curves in recent sessions - is expected to continue on its downward trend next week due to the warmer temperatures and an oversupply as a result of upcoming wind. This may again see gas following it downward, as it has done in part over the course of this week. MLDB
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