European natural Gas prices fell nearly 2.4% on Wednesday, pressured by reports of U.S.–Russia peace discussions despite colder weather accelerating storage withdrawals, ING's commodity experts Ewa Manthey and Warren Patterson note.

Record shorts raise risk of squeeze

"European Gas prices also traded lower yesterday, with the Title Transfer Facility (TTF) settling almost 2.4% lower. Reports of peace talks between Russia and the US weighed on prices. However, colder weather has led to Gas storage falling at a faster pace over the last few days. EU Gas storage is now 81% full, down from a peak of just over 83% in mid-October."

"Meanwhile, the latest positioning data shows that investment funds cut their net long in TTF by 8.7TWh to 15.6TWh, the smallest net long since March 2024."

"This was driven by fresh shorts entering the market, with the gross short rising by 19TWh to 434.3TWh, yet another record gross short. It leaves the market vulnerable to a short-covering rally in the event of any supply surprises or extended cold snaps over the winter."