In early September, demand across the Asian and European markets showed signs of retreat. Following a rapid climb driven by geopolitical tensions, traders shifted to a wait-and-see stance, prompting prices to fluctuate in recent sessions. However, this price adjustment is insufficient to alleviate the low-inventory situation in Europe, as the underlying upward momentum remains unchanged and the market is expected to stay firm.
Market data indicates that the TTF October contract settled at 71.435 euros per megawatt-hour, marking a 2.72% decline. The JKM October contract was reported at 25.530 U.S. dollars per million British thermal units, down 1.39%. Meanwhile, the NYMEX October Henry Hub futures contract declined 2.47% to 2.925 U.S. dollars per million British thermal units.
Regarding infrastructure developments, the Prime Minister of Bangladesh stated on September 2 that negotiations are underway with relevant companies to advance the proposed floating storage and regasification unit project near Mahkeshkhali in the Cox's Bazar district. The terminal is expected to begin supplying regasified LNG by December 2028, potentially boosting the nation's regasification capacity to 600 million cubic feet per day within the next two years.
In Germany, state-owned company DET announced that commissioning cargo for its new floating LNG terminal at the port of Stade is expected to arrive in November. The floating storage and regasification unit "Energos Force" is currently en route to the port after completing a subcontracting agreement involving Jordan. A spokesperson indicated the vessel will arrive as scheduled in September, initiating the terminal's commissioning phase.
Natural gas experts across the European Union have expressed no immediate concerns regarding supply security, with the European Commission seeing no need for intervention, despite inventory levels being considerably lower than the seasonal average of recent years. Following the September 3 Gas Coordination Group meeting, the Commission stated that no immediate risk to supply security exists within the bloc. It noted that although current storage levels have declined, the overall situation differs significantly from the energy crisis triggered by the geopolitical conflict, even as global energy markets remain in a special state due to ongoing supply disruptions. The EU will continue to monitor developments closely, with the next coordination group meeting scheduled for September 24.
According to the EIA natural gas report, as of the week ending August 28, total U.S. natural gas inventories stood at 3,214 billion cubic feet, an increase of 30 billion cubic feet from the previous week. This figure represents a decrease of 50 billion cubic feet compared to the same period last year, a 1.5% year-on-year decline, while remaining 160 billion cubic feet above the five-year average, reflecting a 5.2% surplus.
In the U.S. market, production remains at elevated levels, yet early September heat has bolstered demand expectations, supporting a cautiously stronger price trajectory. Longer-term supply growth pressures continue to exert resistance, with the $3 price level presenting notable upside limitations.
On the strategy front, the European inventory replenishment issue has not seen substantial improvement. Given this backdrop, a tactical long position following TTF price pullbacks is recommended, with existing TTF longs maintained. Compared to Europe, Asian procurement urgency appears less pronounced, suggesting potential for the TTF-JKM spread to widen further.
Key upside risks include strengthened autumn replenishment demand in Asia and potential disruptions to production and export facilities from Middle East conflicts. Conversely, downside risks stem from a rapid de-escalation of Middle East tensions and macroeconomic weakness that could suppress overall demand.