European Gas storage drops under 78% amid cold spells, while speculators shift to a net short position for the first time since March 2024, raising winter market risks, ING's commodity experts Ewa Manthey and Warren Patterson note.

Cold weather drives strong draws

"European Gas storage continues to trend lower, falling below 78% full. The strong draws come amid colder-than-usual weather, though forecasts indicate the weather will turn milder in early December. Despite lower-than-average storage levels for this time of year, investment funds remain increasingly bearish on the European Gas market."

"The latest positioning data shows that speculators shifted from a net long of 15.6TWh to a net short of 11.4TWh. This is the first time funds have been short the Title Transfer Facility (TTF) since March 2024."

"The move was once again driven by fresh shorts entering the market, which pushed the gross short to yet another record high. This large short position leaves a fair amount of positioning risk, if any supply or demand surprises emerge through the winter."