Rabobank analysts said the Ras Laffan strike and an extended closure of the Strait of Hormuz have removed the LNG surplus and pushed up Dutch TTF gas prices. They forecast Q2 2026 TTF at €61/MWh, with full-year 2026 at about €50/MWh and 2027 at €42/MWh. They said they had earlier assumed Hormuz would be closed through early April after strikes on merchant vessels and coastal infrastructure reduced tanker movements to near zero. They added this disrupted roughly one-fifth of global LNG flows, and now expect the strait to stay effectively closed until late April.

LNG Supply Outlook For 2026

They estimate total available LNG supply in 2026 at around 443 million tons, compared with 442 million tons in 2025. They said new US LNG supply will not offset outages in the Middle East and North Africa, and that Egypt will remain a net importer through 2026. They said even a late-April reopening would not restore energy flows before July or August. They also stated that the attacks on Qatari LNG infrastructure prevent a return to pre-war flows. They raised forecasts for Q3–Q4 2026 TTF to €50/MWh and €48/MWh. They said Europe and Asia are competing for limited LNG cargoes. The significant repricing of natural gas means we must act on the view that the LNG glut is over. With Q2 TTF contracts now forecast at €61/MWh, the primary strategy is to build long positions in May and June 2026 futures, as the market has not yet fully priced in this new reality. The April TTF contract has already surged over 15% in the last week to trade near €55/MWh, signaling strong upward momentum.

Backwardation Supports Calendar Spread Trades

This forecast creates a steep backwardation, with Q2 prices much higher than the €50/MWh expected for Q3. This structure strongly supports calendar spread trades, going long on Q2 contracts while simultaneously shorting Q4 2026 or Q1 2027 contracts to profit from the sharp near-term premium. The market volatility reminds us of the 2022 energy crisis, when prices exceeded €300/MWh, suggesting that €61 is a conservative target if the supply disruption worsens. We came out of the 2025/2026 winter with European gas storage at a healthy 58% full, according to the latest Gas Infrastructure Europe data. However, this buffer will be tested as the injection season begins with severely constrained LNG supply. The market deficit will make refilling storage for next winter incredibly expensive and difficult, supporting prices throughout the second half of the year. Competition with Asia for the remaining LNG cargoes is becoming critical. The price spread between the Asian JKM benchmark and European TTF has collapsed to just €2/MWh, indicating Asian utilities are aggressively bidding to secure supply that would have otherwise gone to Europe. We need to monitor this spread closely, as any widening could signal a temporary easing for European buyers, or vice versa. The sustained high gas prices make burning coal for electricity more profitable. Consequently, we should anticipate increased demand for EU carbon allowances (EUAs), a trend we already saw developing in late 2025. EUA futures have already climbed back towards €70 per tonne, and establishing long positions here provides another way to trade the consequences of the gas shortage. Create your live VT Markets account and start trading now.

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