European natural gas prices are pushing higher with Dutch TTF futures climbing above EUR 60 per megawatt hour, raising fresh concerns about storage adequacy across the continent. ING commodity strategists Warren Patterson and Ewa Manthey report the price surge comes despite recent positioning data showing hedge funds have been reducing their net long exposure in the gas market.
The upward momentum in TTF, Europe’s benchmark gas contract, signals tightening supply conditions that are outweighing bearish positioning trends from speculative traders. This price action suggests fundamental market concerns are dominating over technical factors, with storage levels becoming a critical focus as Europe heads into the crucial injection season. Gas traders and energy-intensive industries across Europe face renewed margin pressure as input costs climb.
The divergence between fund positioning and spot prices indicates physical market tightness rather than speculative buying is driving the rally, potentially limiting downside protection even if more funds exit long positions.
FXnCO Insight
European energy consumers and power generators should consider forward hedging strategies immediately as storage concerns override bearish fund positioning, suggesting prices may remain elevated despite reduced speculative interest.
Source: FXStreet