Gas: TTF sell-off continues - ING

European natural gas prices came under additional pressure yesterday. TTF fell by almost 6.7%, leaving prices at their lowest level since mid-December, ING's commodity analysts Warren Patterson and Ewa Manthey notes.

Market is starting to price in possible Russia-Ukraine peace deal

"From a technicals perspective, the scale of the move in recent weeks has left the market in oversold territory. Investment funds have been aggressively reducing their net long in TTF, selling 27.4TWh over the last reporting week. This left funds with a net long of 231.3TWh. Recent mild weather has contributed to the weakness."

"However, with storage at just 40% full, the region faces challenges in refilling storage, relying more on LNG imports. The recent price weakness has TTF trading below spot Asian LNG, which should see slower flows into Europe."

"The scale of the move lower also suggests the market is starting to price in prospects for a Russia-Ukraine peace deal, one that could include the resumption of some Russian pipeline gas to Europe. If this happens, it changes the outlook for the European market significantly."