Rare Arbitrage Play in the Works? Possible insane melt up?
TTF Futures are currently at 115, and to get the US MMbtu equivalent of 31-33$, and they peaked at around 60-63$ US Natural gas equivalent ( For reference those are BOE of nearly 300-330$). Around December of last year the US Started to export Natural gas in the highest amounts in a long time to take advantage of the higher prices and to help europe keep its lights on.
Price difference alone may not trigger the arbitrage, but rather possible sanctions. We already had the NordStream 2 pipeline cancelled, and eithe Russia might trigger a cancellation of the first Nordstream 1 pipeline as well as supplying of oil and gas to countries that sanctioned it
OR the Western Europe/Nato powers might do it. No doubt that oil would have a melt up situation. But natural gas to could have a huge melt up far more then oil as with no gas available in europe they would be forced to use us gas, and this could get rid of the insane spread.
If Russia turns of its pipeline, we could see europe gas prices rocket to 200-400$ if all gas is turned off ( 1200-2400$ BOE ). These prices are obviously quite crazy, so it would make no sense for europeans to buy their local gas when America can supply for far less
If all of europe does this " save money hack " however buy the law of arbitrage the spreads would largely diminish over time.
Price difference alone may not trigger the arbitrage, but rather possible sanctions. We already had the NordStream 2 pipeline cancelled, and eithe Russia might trigger a cancellation of the first Nordstream 1 pipeline as well as supplying of oil and gas to countries that sanctioned it
OR the Western Europe/Nato powers might do it. No doubt that oil would have a melt up situation. But natural gas to could have a huge melt up far more then oil as with no gas available in europe they would be forced to use us gas, and this could get rid of the insane spread.
If Russia turns of its pipeline, we could see europe gas prices rocket to 200-400$ if all gas is turned off ( 1200-2400$ BOE ). These prices are obviously quite crazy, so it would make no sense for europeans to buy their local gas when America can supply for far less
If all of europe does this " save money hack " however buy the law of arbitrage the spreads would largely diminish over time.