LNG: Further Decline in TTF Forward Curve Necessary to Cancel US Cargoes
Dec-04 13:42
The TTF forward curve is trending towards long-term US LNG export costs, but may need to fall towards the parity with Henry Hub to lead to US cargo cancellations, according to ICIS analyst Alex Froley.
- The current TTF forward curve for European gas during 2025 to 2030 is in a range of around $10/MMBtu down to $8/MMBtu at the end of the period, declining in line with expectations of greater supply, mainly from the US and Qatar.
- The forward curve is now reasonably close to long-term US export plant costs (estimated at 115% of Henry Hub plus $3.50 for plant cost and shipping).
- However, during the pandemic, US output wasn’t cut back until TTF dropped through long-term cost levels to hit parity with Henry Hub.
- This may mean that, if a global supply wave of LNG reaches the market in 2027/28 faster than demand can absorb it, the forward curve could drop to equalize with Henry Hub in order to cancel US cargoes.
- That scenario would represent a ~50% decline in TTF over the next two years, “albeit likely only for a short period of time until new demand infrastructure is completed,” according to Froley.
- Froley notes however that there could be a lot of demand waiting at levels only slightly lower than today’s prices.
Source: Alex Froley
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US TSY OPTIONS: Dec'25 2Y Broken Put Condor
Nov-04 13:40
- 10,000 TUZ5 103.87/104.37/104.5/104.87 broken put condors ref 104-05.5 to -05.62, 7.5 net
FOREX: Key AUDNZD Resistance in Focus Ahead of NZ Employment Data
Nov-04 13:37
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CANADA: Carney Seen Running CAD75B Deficits, Record Outside Covid
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- Economists surveyed by MNI say deficit in Canada budget due Tues after 4pm EST will be CAD75b in fiscal year that began April 1, and in the next fiscal year. La Presse newspaper reported it could top CAD100 billion.
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