Featured Image

Henry Hub and TTF Prices Collapse Following Low Temperatures


By Matthew Hoza  |  January 25, 2024

Both sides of the Atlantic appear to have mirrored one another recently in terms of weather, with the U.S. and Europe both experiencing recent drops in temperature followed by a warming trend in the ten-day outlook for major population centers. This provided short-lived relief to a lagging storage withdrawal season on both continents and a brief run-up in Henry Hub pricing in the U.S. and TTF in Europe. However, that brief respite has given way to lower pricing, signaling an increasing risk of oversupply this summer.

Both the U.S. and Europe entered the previous 2023 injection season with storage brimming. In the U.S., even in the face of record power burn levels, robust production growth out of the Permian allowed storage to fill. While in Europe, LNG imports and regulatory changes allowed storage to fill at a record pace. These factors, in addition to a mild start to the winter withdrawal season, have left both U.S. and European storage starting the year sitting near their five-year max levels.


After a historically warm European winter in 2022/2023, early January cold weather helped push cumulative storage withdrawals in line with the five-year average. However, a warming outlook will likely widen the gap in the near term.


Meanwhile in the U.S., bitter temperatures across the country caused surging heating demand, likely helping to break total demand records. However, warmer temperatures are returning as the polar vortex that carried frigid temperatures wanes. Like Europe, this cold snap helped push some fundamentals in line to their five-year averages; however, these are likely to widen in the near term.


While the onset of colder temperatures brought on a flurry of buying on the U.S. spot market and of the February Henry Hub contract, longer-dated futures pointed lower, as fundamental outlooks were not deterred by near-term worry. Market fundamentals eventually caught up with February contracts, resulting in 25% drop over the course of ten days.

March-April spreads for both Henry Hub and TTF have also collapsed with TTF flipping to an April premium. The March-April spread, often called the widow-maker spread, signals undersupply in the ending days of winter when the spread is positive and oversupply when the spread is at parity or negative. Given where storage started this winter, both spreads have remained minimal throughout the season with Henry falling about $0.25/MMBtu since the start of winter to parity and TTF dropping about $0.50/MMBtu but recently rebounding to an April premium.


With March Henry Hub contracts trading near five-year lows (only being beaten out by 2020) and TTF giving a premium to the start of the spring, eyes will start to turn toward the summer and the coming injection season. Expect ‘oversupply’ to be the most common term in the 2024 natural gas lexicon, whether you are in the U.S., European, or LNG markets. How will U.S. production respond to continued low pricing? And where will U.S. LNG supplies land if European storage comes out of winter at record inventory levels? Keep up to date with changing market conditions with the Henry Hub Outlook, accessible by FactSet Workstation users here, and coming Insights.



BTU Analytics is a FactSet Company. This article was originally published on the BTU Analytics website.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

BTU oil and gas data

Matthew Hoza

Head of European Energy Markets

Mr. Matthew Hoza is the Head of European Energy Markets at FactSet. In this position, he spearheads the expansion of FactSet’s data and analytical offerings in the European natural gas and power sectors. Prior to his current role he managed the U.S. Power Markets and U.S. Natural Gas teams, focusing on developing and marketing comprehensive data sets and analyses for each commodity. He earned an MS in Finance from the William E. Simon Graduate School of Business at the University of Rochester and a BS in physics from Florida State University.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.