European Gas Update – Tracking the Oil Market in the Aftermath of Liberation Day

European gas prices have been another victim of Trump’s tariff policies, with front month TTF down significantly over the past week . C eteris paribus , a sharp sell-off in European gas prices is unjustified fundamentally as injection requirements are up significantly year-on-year (17bcm with a 10% down-adjustment to the 90% storage target, 21bcm assuming 5%), whilst the impact of tariff policies on industrial gas consumption is nuanced given the sharp reductions seen since 2022 and potential policy support on the way. However, with substitution possible in key demand niches, natural gas is highly sensitive to movements in associated commodity markets. Indeed, Europe’s requirement to import a significantly higher volume of LNG year-on-year, outcompeting price-sensitive Asian buyers , places Asian switching levels at the centre of TTF price formation through Sum-25. T he sharp fall in oil prices since Liberation Day (with Brent now anchored in the low $60s/bbl) has pushed gas-to-liquids parity levels, and hence switching levels, significantly lower . Effectively, TTF has to work less hard to secure marginal supply. We subsequently see a relatively strong link between oil prices and gas prices in Sum-25. With our expectations now for Brent in the low $60s /bbl and the LPG parity level in the low-mid €30s/MWh, we shift our TTF forecast lower. We now expect TTF to average €37/MWh in Sum-25, vs €44/MWh previously, whilst Win-25 has been adjusted to €38.5/MWh.