Europe’s gas market to rely on imported flexibility – IEA

Despite current unusually high prices, the agency is relatively relaxed that portfolio LNG can replace domestic swing without the need for radical change in European contracting

European and global gas prices in the second quarter have not been as “calm” as the IEA was expecting at the end of Q1, Jean-Baptiste Dubreuil, the organisation’s senior gas analyst, admitted in early July. “A string of extreme events”, including a drought in Latin America and heatwaves in Asia and the Pacific coast of North America, have driven prices higher. In Europe, the benchmark Dutch TTF market averaged $8.70/mn Btu, while current spot and forward prices led the IEA to assume “prices will remain well above their five-year averages during the second half of 2021, at $11/mn Btu”. $8.70/mn Btu – Average TTF price in Q2 Maintenance and unplanned outages have reduced supply, while