European gas, LNG markets expect volatility on US presidential elections

Energy markets across the globe saw strength from uncertainty around the US presidential election Nov. 5, with gas and LNG markets seeing support US voters headed to the polls.

Platts last assessed the Dutch TTF month-ahead contract at Eur40.325/MWh Nov. 4, a rise of 3.84% compared with Nov. 1.

Northwest European LNG prices saw strong support to start with the week with the Platts DES Northwest European marker for December being assessed at $12.666/MMBtu Nov. 4, up 49.3 cents/MMBtu, or 4.05% on the day.

Although traders debated the bullish or bearish outcomes for the global gas and LNG markets from the election results, European traders expected near-term volatility over the results and expected that there would be both a short and long-term impact on the global LNG markets given the pause on LNG export projects, as well as candidates Kamala Harris and Donald Trump's diverging positions on supporting Ukraine in the conflict with Russia, even as the country continues to transit Russian gas molecules through its territory.

“If Trump gets elected, then it will be worse and very chaotic for European gas prices," an LNG trader said. "We'll probably see it impact sensitive countries around the globe and lead to more volatility in the near term.”

" I don’t know -- it’s a toss-up," a Mediterranean-based LNG trader weighed in. "No clear sign from the market, I would say. TTF is ambiguous. Bitcoin seems to favor Trump. Not sure! It will be a long night!"

A Germany-based gas trader was curious whether the change in US presidential leadership would impact US Gulf Coast fossil fuels production. He was uncertain whether a Harris victory would result in a tougher White House stance on natural gas production. A Trump victory would be bearish for the trader, as he doesn’t doubt the former president’s support for increased fossil fuels production and the LNG facilities in the pipeline.

Market sources also pointed to uncertainty around the impact of the US presidential elections on the fate of the Russia-Ukraine transit agreement, set to expire by year-end.

“I think there’ll be a little bit of turbulence due to the US elections,” one Italy-based trader said. “And of course anything related to the halt -- or not -- of Sudzha flows will generates lots of price movement.”

“If Trump wins and Ukraine is forced to give some of its areas to Russia, maybe it would be easier to finish these [transit] negotiations and keep the status quo,” a Denmark-based gas trader said.

“If Kamala wins, on the contrary, maybe we’ll stick to no Russian gas in Q1," the source added. "Perhaps they [Ukraine] could something in return -- financing for weapons to keep the Russians out.”

A UK-based trader argued that if Trump got elected, the country would shift more its focus on domestic affairs, potentially interfering less with decisions surrounding the future of the Russia-Ukraine transit point.

While some have argued that electing Trump would be bearish for the oil and gas complex, others said that the direction that the market would take after such an election was less clear.

“It is tricky between the impact on oil and gas prices,” a Spain-based trader said.

“Trump is not willing to export more gas either,” he added, confirming that the candidate would prioritize low domestic prices over exports.

He added that Democrats could keep on funding Ukraine’s war efforts if elected.