March in European Gas
For quite some time my monthly commentary has been a tale of unadulterated woe for gas traders and March isn’t going to be a month that reverses that trend. That isn’t to say there weren’t any opportunities, because there were quite a few and certainly in the first half of the month. I would also add that far too many smart people caused their own problems by dismissing the war, when the odds of it happening were quoted by experts in numerous places at 80%.
For those that were long or flat as the market opened on March the2nd, the initial move was strong but not outrageous. It gave people time to get long as it became obvious quickly, that this was different to the nuclear busting campaign of June 2025.
The bulls remained in control for the remainder of that first week and WC 9th March started in a similar vein until Donald decided he didn’t like oil at $100! I can’t remember his exact comments on that first occasion, but Oil and Gas dropped like a stone, with equites breathing a big sigh of relief and heading in the other direction.
The respite was short lived however and markets soon realised Donald was talking his political book and upward momentum was renewed. Direction of travel continued in this fashion until the big one occurred on the night of Wednesday the 18th March. Ras Laffan was hit by Iranian missiles and for the first time in the war we had the very real prospect of gas infrastructure being seriously damaged.
The market opened around 72 euros, but that was as good as it got for Bertie Bull as the rest of the day saw a fairly continuous slide back down to where we closed @ 61. Mid afternoon did see a very brief resurgence as the Qatari’s announced that 18% of the plant would be out for 3-5 years, but this was largely brushed off by the market which had obviously feared the damage to be far worse.
For any bulls that didn’t use Ras Laffan to take their profit, the rest of March was a painful existence. The market drifted lower and lower, despite oil hitting new highs and no matter what was happening on the ground in the Middle East. Even another weekend of escalation with the Houthis becoming involved and the weather causing temporary havoc with Australian infrastructure, could only cause a meek and temporary response with gas once again finishing Monday down.
Fittingly the culmination of the down move came on the 31st with traffic on the straight increasing slightly, some signs of less aggressive language from the Iranians and Donald saying he will just walk away and leave the rest of the world too it.
TTF got absolutely hammered, wit May finishing around 51 euros as weary bulls headed on mass for the exit door.
Normally hindsight can offer an obvious story about why and what has happened, but I would say the second half of March has been much more ambiguous and so must have been particularly hard from a real time perspective.
The backwardated nature of the curve didn’t help the bulls, with the warm weather and a time lag on boat diversions leading to an oversupplied front. This did provide a nice opportunity to sell spreads and lots of traders did take advantage of that, but also gave a bearish feeling at the front.
This feeling was supplemented by a lack of buyers, with many players on reduced limits, spec length maxed out and physical buyers being stranded in Asia.
The shape of the European curve remained confusing, with Summer Vs Winter signing off in positive fashion, with traders perhaps fearing regulatory intervention or just leaving it well alone after it has caused so many problems for people over the last few years.
Trump is due to speak again tonight and it is difficult to imagine his speech will be of the bullish variety. I would expect the direction of travel to continue Southwards for now, but would suggest this story will have many more twists and turns and April won’t be an easy ride either.