Customs data shows that China imported about 7% less gas last month compared to August. This brings total gas imports for the year to around 6% lower than last year. Earlier this year, the difference was 10%, suggesting some recovery in demand, especially with increased LNG imports since April. If this recovery continues, we might see rising gas prices in Europe. As the heating season begins, the EU will likely need more LNG. Recently, the TTF European benchmark price dropped slightly to about EUR 33.50 per MWh, as expectations for falling temperatures decreased.

Gas Storage Levels

Gas storage levels are slowly increasing, with current capacity at 83%. In Germany, storage levels have stabilized after a decline earlier last week. As of October 14, 2025, the gas market shows mixed signals. China’s demand for gas is recovering, with year-to-date imports now only 6% below 2024 levels, a significant improvement from earlier this year when the deficit was 10%. This rising demand for LNG will lead to more competition for cargoes as Europe’s heating season approaches. Although European gas storage stands at 83% capacity, this is lower than previous years. For comparison, in October 2023, EU storage was over 97% full, according to Gas Infrastructure Europe data. The current slow rate of injections suggests we may have reached our seasonal peak, making the market more vulnerable to a cold winter compared to past years.

Market Volatility and Trading Strategies

The recent drop in the TTF benchmark price after hitting €33.50 per MWh should be viewed as temporary fluctuations due to short-term weather changes. Implied volatility on front-month TTF options has risen to about 80%, indicating that traders expect sharp price movements. This uncertainty, combined with good storage levels, suggests limited potential for price increases but a turbulent trading environment. In light of these dynamics, derivative traders may want to consider strategies that take advantage of these expected price swings. Purchasing November or December 2025 straddles could profit from significant price changes driven by weather forecasts or LNG shipment news. Alternatively, traders could use bull call spreads to bet on a modest price rise while managing risks, knowing that the 83% storage level will likely prevent the drastic price spikes seen in 2022. Create your live VT Markets account and start trading now.

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