Technical pullback from the peak reached in late 2022 has appeared in Friday’s European natural gas spot prices. However, the latest analyses from Deutsche Bank and Bernstein indicate that the storage constraints and energy supply-security risks in Europe before winter are far from resolved.
According to data from the European Gas Infrastructure Association, European gas inventories stand at only 67.64%, which is 16.2 percentage points below the five-year average. Bernstein analysts calculate that to reach the 90% inventory target by early November, Europe would need to inject more than 100 terawatt-hours (TWh) of natural gas in a short period, with a funding gap of about EUR 7 billion. Deutsche Bank has gone even further by directly raising its year-end TTF natural gas benchmark target price sharply by 50% to EUR 75 per megawatt-hour. This suggests that the market’s prior expectations for Europe to get through the winter smoothly were overly optimistic.
This structural shortage of energy supply is likely to have a pronounced stagflation spillover effect on the global macroeconomy. The high cost for Europe to replenish supplies will not only push up inflation pressure on the European Central Bank and reduce its room to cut rates, but may also intensify global competition for liquefied natural gas (LNG) procurement. Under the squeeze of a strong U.S. dollar combined with energy-input-driven inflation, global bond yields may face a renewed upward risk, weighing on valuation recoveries of traditional risk assets.
For the crypto market, the potentially tighter macro-liquidity environment remains the biggest headwind. If energy inflation re-accelerates in Q4 and leads major central banks to turn more hawkish, institutional funds’ risk appetite for risk assets such as $BTC will cool significantly. The market should watch for the risk of a second dip triggered by a decline in the liquidity premium.#欧洲天然气 #通胀 #macroeconomy
According to data from the European Gas Infrastructure Association, European gas inventories stand at only 67.64%, which is 16.2 percentage points below the five-year average. Bernstein analysts calculate that to reach the 90% inventory target by early November, Europe would need to inject more than 100 terawatt-hours (TWh) of natural gas in a short period, with a funding gap of about EUR 7 billion. Deutsche Bank has gone even further by directly raising its year-end TTF natural gas benchmark target price sharply by 50% to EUR 75 per megawatt-hour. This suggests that the market’s prior expectations for Europe to get through the winter smoothly were overly optimistic.
This structural shortage of energy supply is likely to have a pronounced stagflation spillover effect on the global macroeconomy. The high cost for Europe to replenish supplies will not only push up inflation pressure on the European Central Bank and reduce its room to cut rates, but may also intensify global competition for liquefied natural gas (LNG) procurement. Under the squeeze of a strong U.S. dollar combined with energy-input-driven inflation, global bond yields may face a renewed upward risk, weighing on valuation recoveries of traditional risk assets.
For the crypto market, the potentially tighter macro-liquidity environment remains the biggest headwind. If energy inflation re-accelerates in Q4 and leads major central banks to turn more hawkish, institutional funds’ risk appetite for risk assets such as $BTC will cool significantly. The market should watch for the risk of a second dip triggered by a decline in the liquidity premium.#欧洲天然气 #通胀 #macroeconomy