TTF prices hover at two-month low

European natural gas futures hovered around €33 per megawatt-hour on Monday, remaining near their lowest levels in two months. The market has found a floor amid balanced fundamentals, supported by strong supply and a notable softening in demand, particularly from the power generation sector.

The recent heatwave that had boosted cooling demand across the continent has subsided, with average temperatures now trending lower across north-west Europe. This seasonal shift has reduced the use of air conditioning and, consequently, overall electricity consumption, easing pressure on gas-fired power plants.

On the supply side, fundamentals remain solid. Norwegian pipeline exports have been steady, with only minimal disruptions from maintenance activities, while liquefied natural gas (LNG) send-outs from European import terminals continue at a consistent pace.

Further bolstering regional supply, sluggish demand for LNG in China—driven by the country’s economic slowdown and escalating trade tensions with the U.S.—has resulted in more cargoes being redirected to Europe. The imposition of higher U.S. tariffs has weighed on Chinese industrial activity, reducing energy consumption and freeing up global LNG supply.

Meanwhile, the European Union's gas storage facilities are reported to be at 60.3% of total capacity, a healthy level for early July and well in line with the EU’s energy security targets. The combination of ample storage, strong import flows, and muted summer demand is contributing to overall market stability and keeping prices in check.

Traders are now closely monitoring upcoming weather patterns, as well as potential geopolitical developments—particularly involving Russia and global LNG trade flows—that could alter the current equilibrium heading into the peak refill season.