European Energy Markets:
TTF, NBP ready to move higher even without Iran war
Co-ordinated US and Israeli strikes on Iran over the weekend have injected fresh geopolitical risk into global energy markets. Traders are now anticipating a potential disruption to flows through the Strait of Hormuz.
For Europe, the issue is less about immediate physical shortages with EU gas storage still comfortable but not excessive.
The technical picture for most EU energy markets remains mixed. Even before the war, the TTF and NBP bears were already exhausted. It would be easy for the bulls to step in now. The Iran conflict may now ignite that tinderbox. Regardless of the actual impact on physical flows in Europe.
At the end of last week, Brent crude looked ready to continue higher only marginally before continuing sideways again. It remains to be seen how the conflict will actually impact the trading behaviour.
Get ready for some headline-driven price spikes as the conflict develops. Zoom out of the charts to not get eaten up.
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TTF Front Month gas outlook
- Neutrality is maintained with price having pushed sideways all of last week within €29.27 – 33.15/MWh (S1 – R1).
- Weakening bearish momentum within the descending channel favours consolidation. Our neutral algo outlook reinforces range-bound price action.
- This is why the market is assessed as neutral, despite still being inside a descending channel.
- Indicators do not yet warrant decisive positioning, though speculative shorts may be reduced while physical players begin monitoring trough buying opportunities on the hourly chart.
- MACD and EMAs are flatlining while stochastic swings higher. The bears are exhausted.
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TTF Sentiment Benchmark
What is fascinating about this week’s results is how the US/Iran war has not materially changed the sentiment for the week ahead.
The survey was posted before the war broke out. Even then, the sentiment was already bullish. This was in alignment with the bearish exhaustion we have seen on the TTF charts.
A big chunk of votes came in after the war broke out. But it did not change the results meaningfully. The bulls remained comfortably in charge without fully taking over.
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