Forecasting TTF Prices: Uptick Until Q1 2025, Then Gradual Decline Until 2027

As we move into the second hald of 2024, the landscape for Title Transfer Facility (TTF) natural gas prices is expected to exhibit notable rise in the coming month, reflecting a combination of market dynamics, geopolitical factors, and long-term trends in energy consumption and supply. Our forecast, spanning from January 2024 to December 2027, provides insight into the anticipated price movements and underlying factors driving these changes.

Between January 2024 and December 2027, TTF prices are projected to range between €20 and €40 per megawatt-hour (MWh). The highest prices are forecasted for February 2025, reaching €39.5/MWh, while the lowest prices are expected in December 2027, at €21.7/MWh. Beginning in February 2024, the price is forecasted to be €25.9/MWh, marking the start of an upward trend. This trend is expected to continue, with prices reaching a peak of €39.5/MWh by February 2025, reflecting heightened demand during the winter months and potential short-term supply constraints.

After reaching this peak in February 2025, prices are anticipated to decline steadily, characterized by a gradual easing of supply pressures and the stabilization of market conditions. A significant reduction is projected in the spring of 2026, with prices expected to decrease from €34.9/MWh in February 2026 to €28.8/MWh by April 2026. This decline is driven by seasonal demand reductions and increased supply availability.

Several key factors influence these price trends. The influx of liquefied natural gas (LNG) to Europe, driven by increased global production and improved logistics, is a critical factor contributing to the stabilization of TTF prices. Long-term contracts with major LNG suppliers offer price stability and predictability, mitigating the impact of short-term market fluctuations. Additionally, a steady decline in natural gas demand across the European continent, driven by energy efficiency measures, a shift towards renewable energy sources, and industrial decarbonization efforts, is expected to exert downward pressure on TTF prices.

Geopolitical stability, particularly involving key natural gas-producing and trading countries like the USA, is also crucial. Assuming no major conflicts or disruptions, the market is expected to remain stable, maintaining the predicted price range.

In summary, TTF prices between January 2024 and December 2027 are expected to experience an initial upward trend, peaking in February 2025, followed by a steady decline and eventual stabilization. While prices will remain higher than pre-2022 levels, the combination of abundant LNG supply, stable long-term contracts, and decreasing demand will help normalize prices within the €25-30/MWh range. Stakeholders in the energy market should prepare for these anticipated changes and adjust their strategies accordingly to navigate the evolving landscape.