ICIS looks country-by-country at the key potential supply, demand and regulation changes in 2017 which could impact natural gas prices and market liquidity in Europe.
The cascade in prices over the forward six delivery months at the Dutch TTF – Europe’s most liquid gas hub – was steep as of the end of December 2016, with a number of bullish fundamental drivers providing relative support to Q1 ‘17 delivery contracts compared to Q2 ‘17.
The uncertain performance of Britain’s Rough storage site – where stocks are heavily depleted due to last summer’s restriction on injections – low LNG supply to northwest European terminals and expectations of greater gas demand for power generation all point towards a greater drop in prices from Q1 to Q2 in 2017 compared to Q1 to Q2 in 2016.
Beyond the winter, the supply outlook for Europe is more bearish. Pipeline imports rose to record highs in 2016 and Europe’s traditional suppliers will be keen to secure market share as global LNG production capacity continues to ramp up and potentially compete to satisfy European demand.