JAPAN: "JAPAN PM TAKAICHI: PROCEEDS FROM BOJ'S ACCELERATED ETF SALES CAN [...]

"*TRUMP TO MAKE ANNOUNCEMENT 1PM ET WED." - BBG

"*FRENCH BOND FUTURES FALL AFTER BIGGEST JUMP IN SIX MONTHS" - BBG

While oil was only marginally higher Tuesday, natural gas rallied more decisively. Crude flows from the Middle East are estimated to be close to pre-war levels but LNG is still below, although shipments are also recovering but slowly due to limited spare carriers which are specialised to hold gas. With European storage levels still well below seasonal averages, a material increase in global supplies would be welcomed. Unti then, European gas prices are likely to remain supported. 

• Dutch TTF rose 3.9% to EUR 76.355 on Tuesday after reaching EUR 77.55, the highest since 21 September. It is now up 5.5% in October. Storage refilling is occurring but only gradually and was only 72.8% full on Monday compared to over 80% for the same time last year. This means that heating supplies will be expensive especially if there is a cold snap.
• There is little variability in contract prices across upcoming months and are above EUR 75 until March 2027. The heating season ends at the end of April.
• The UKMTO reported 9 attacks on commercial ships in Hormuz so far in October, which is significantly higher than September’s total of 18 given the month has only just started. A Greek LNG tanker was hit near Hormuz, according to the Athens News Agency, but continued its journey. While flows are improving, the situation in the region remains highly volatile risking a spike in energy prices.
• US gas exceeded $3 on Friday and is now up 3.2% in October. It rose 1.7% Tuesday to $3.117 on increased demand from LNG export facilities. Domestic demand is likely to remain muted for now with warmer weather forecast into mid-month.
• Lower-48 US production was up 1.8% y/y on Monday and demand +1.7% y/y, while estimated flows to LNG export terminals were 2.1% higher on the week, according to BNEF data.