Huge reversal today
Natural gas prices were already coming down when Putin hinted at more supply coming from Russia.
There's an open question about whether Russia can even supply the gas and whether it has enough in domestic storage but the reversal today could certainly change the psychology of the market. I don't know what level of financial flows have been behind the run up, or whether there was a short squeeze and fund blowups but the charts of UK and European TTF gas tell the same story.
UK gas:
TTF:
There's a decent case for buying the euro or European equities if this reversal holds. Of course, that would be a bet on an average winter.
This chart shows the percentage decline in gas drawdowns over the past number of winters. That's a clunky way to look at it but it highlights the potential impact of weather.
