Trader Morning Call — Thursday July 23, 2026

Trader Morning Call — Thursday July 23, 2026 Weather - Continental Europe: ECMWF ensemble shows warm bias building into week 2, Frankfurt day10 warm probability at 47% (>1sd), Paris at 49% (>1sd). Week 2 temps could run 3-5°C above seasonal norms, suppressing early-winter demand. - Wind forecasts: Amsterdam 10-day avg wind at just 1.7 m/s (peak 3.1 m/s), very low wind generation expected across NW Europe. London avg 2.4 m/s, Paris 2.5 m/s. Bearish for power prices on the supply side, but offset by cooling demand. - US heatwave: Dallas 15-day CDD at 256.9, Phoenix 308.1, Houston 220.3, extreme cooling demand across the Southern CONUS. Imperial Valley under triple-digit heat alert with energy officials issuing conserve alerts. - US 6-10 day outlook: Ridge over western/central CONUS, trough over northeast. Above-normal temps favored across most of the CONUS. Seasonal outlook confirms strengthening El Niño (81% chance of very strong event OND 2026), favoring above-normal temps into autumn. - Cyclone Bertha: Chevron shutting production in Gulf of Mexico in preparation, potential supply disruption for US gas and oil production, though Henry Hub already under pressure. Euro Gas Fundamentals - EU storage: EU total at 54.2% full (612.9 TWh), 7-day change +1.4pp from 52.8%. This is the second-lowest level for this point in the year in 15 years, per Equinor data. Injection pace of +0.21pp/day is insufficient to hit 80% target by November. - Germany storage: 45.5% full (112.2 TWh), critically low for Europe's largest economy. Injection trend +0.10pp/day, well below the pace needed for winter readiness. - Italy storage: 72.9% full (148.2 TWh), relative bright spot, but still below 5-year average. Netherlands at just 33.1% full (47.6 TWh), the weakest of major EU economies. - Equinor warning: CEO Opedal says EU "will probably be difficult to get above 80% storage levels" heading into winter. Competition with Asia for LNG cargoes amid Iran war is the primary driver. - Naturgy warning: Spanish utility warns of "likely gas shortages and price spikes" this winter, with potential shortages by February. EU ban on Russian gas from 2025 cited as structural risk. - Norway flows: June oil output beat forecasts at 1.827m bpd (above official forecast), but gas flows remain the critical variable for Europe. No major NCS maintenance reported this week. - Ukraine transit: GTSOU amending rules to maintain EU imports from October, bundled capacity rules with EU neighbors could otherwise halt cross-border trade. Minor bullish for maintaining ~6 mcm/d Slovakia-Ukraine route flows. Technicals - TTF front-month: Last at €62.63/MWh, 20-day MA €49.41, 50-day MA €47.82, 200-day MA €39.82. Price is +56.7% vs 200-day MA, extreme extension. Trading at 52-week highs (€62.40). Momentum is parabolic; risk of mean reversion if geopolitical premiums ease. - Brent front-month: Last at $94.10/bbl, 20-day MA $79.25, 50-day MA $87.68, 200-day MA $79.83. +18.0% vs 200-day MA. 20-day range $71.57-$94.20, at the top end. 52-week percentile at 59%ile. Resistance at $94.20 (20-day high), support at $87.68 (50-day MA). - Henry Hub: Last at $2.94/MMBtu, 20-day MA $3.08, 50-day MA $3.10, 200-day MA $3.45. -14.5% vs 200-day MA, downtrend confirmed. 52-week at 9%ile. Weakness vs TTF reflects decoupling: US gas trapped domestically while European gas soars. - EUA Dec: Last at €85.88/tCO2, no MA data available. +4.16% on the session. Key level to watch: €85.88 as resistance; prior range €78-€80 appears broken to the upside. - Gold: Last at $4,133.59/oz, 20-day MA $4,072.67, 50-day MA $4,259.67, 200-day MA $4,479.48. -7.5% vs 200-day MA, downtrend. Gold declining despite geopolitical turmoil suggests dollar strength and risk-on rotation into energy. Gas Market - TTF front-month: Surged +4.95% to €62.63/MWh on Wednesday, the largest single-day gain in weeks. Driven by Houthi Red Sea blockade threat and renewed Hormuz tanker attacks. - TTF Q+1: €61.72/MWh (+4.80%), TTF Cal+1: €44.19/MWh (+3.65%), back-end lagging front-month, curve steepening. Summer 2027 vs Winter 2026-27 spread widening reflects storage refill anxiety. - NBP front-month: €64.34/MWh (+4.81%), NBP Q+1: €64.22/MWh (+4.60%), NBP Cal+1: €46.94/MWh (+3.43%). UK premium to TTF narrowing to ~€1.70/MWh. - THE M+1 (German gas): €63.15/MWh (+5.08%), tracking TTF closely. German gas market faces "price risk this winter even if Hormuz reopens" per industry association. - CFTC positioning (Henry Hub): Managed money net short -105,501 lots, WoW net change -45,124 (adding shorts). Producer net -27,934, swaps net long +196,791. Bearish sentiment entrenched in US gas. - CFTC positioning (Brent ICE): Managed money net short -16,324 lots, WoW net change -7,326 (adding shorts). Contrarian: market net short Brent while prices rally to $94, short squeeze risk elevated. LNG Markets - JKM front-month: $22.00/MMBtu (unchanged on session). 20-day MA $17.06, 50-day MA $17.63, 200-day MA $14.20, +50.2% vs 200-day MA. Asia premiums to TTF widening. - MOC activity: No specific data available, but structural tightness in Middle East supply is the dominant driver. India emerged as top long-term LNG buyer in 2025 (8.4 mtpa contracted). - China demand: China's LNG procurement boom tightening global market per industry reports. China LNG comprehensive import CIF price index at 176.59 points, elevated vs historical levels. - Pakistan paying record sums for spot LNG as Qatar supply falters due to Hormuz closure. TotalEnergies accepted offer for July 27-28 delivery at premium pricing. - Egypt talks: In negotiations with Shell, BP, TotalEnergies for 15-18 cargoes/month multi-year LNG supply deal, structural demand addition from a returning buyer. - Hormuz impact: 20% of global LNG locked inside the Strait. Bab el-Mandeb blockade formalizes disruption already priced in, per analysts. Most vessels already avoiding both chokepoints. - Equinor CEO: "Europe entering winter with higher exposure than before", fewer LNG cargoes arriving due to Asia competition. EU likely to lose out to Asia for spot cargoes. UK Power & Continental Power - GB day-ahead: £138.08/MWh (unchanged). UK Power Cal+1: £95.92/MWh (+3.31%). UK Power Q+1: £129.75/MWh (+3.58%), forward curve rallying on gas linkage. - German power front-month: €124.46/MWh (unchanged). German Power Q+1: €145.88/MWh (+4.17%). German Power Cal+1: €110.08/MWh (+3.20%). Q+1 at steep premium to Cal+1, winter risk premium embedded. - French power: FR Base M+1 at €106.19/MWh (+16.47%, massive move). FR Base Q+1 €121.52/MWh (+7.91%), FR Base Cal+1 €69.68/MWh (+5.46%). French nuclear availability critical. - Italian power: IT Base M+1 at €171.51/MWh (+5.10%), IT Base Q+1 €173.94/MWh (+4.29%). Southern Europe premiums reflect gas dependency for power generation. - Spanish power: ES Base M+1 at €127.23/MWh (+11.67%). Spain's Naturgy warning of gas shortages supports power price upside. - Day-ahead spreads: IT_DA €169.64/MWh vs DE_DA €108.12/MWh, Italian premium of €61.52/MWh reflects higher gas burn and limited interconnection. - Nordic power: NORDIC Base M+1 at €67.95/MWh (+6.07%), relatively insulated by hydro, but still dragged higher by continental linkage. - NEM Australia: Victorian spot crashed -64.02% to A$34.69/MWh, South Australia -41.05% to A$59.55/MWh, wind/solar flooding the market. NSW Base Q+1 at A$82.40/MWh. Coal Market - Newcastle coal physical: $120.10/t (no live change data). VanEck Coal ETF (Newcastle proxy) at $23.85 (+1.75%). - LNG-to-coal switching: OilPrice reports "LNG Supply Crisis Pushes Buyers Toward Coal and Oil", as Asian spot LNG at $22/MMBtu, coal at thermal parity of ~$120/t makes coal ~$8-10/MMBtu equivalent. Switching economics favor coal at current spreads. - No API2 price data available, market qualitatively supported by gas strength. Dark spreads likely widening as coal outperforms gas on relative fuel cost. - China domestic coal: Prices stagnating at elevated levels per prior reports; buying appetite stepped back. Chinese PMI weak but supply-side focus supporting prices. - India demand: India's long-term LNG buying spree (8.4 mtpa in 2025) suggests coal-to-gas switching limited, India remains structurally coal-dependent for power. Carbon Market (EUA) - EUA Dec: €85.88/tCO2 (+4.16%), breaking above the prior €78-€80 range. This is a significant technical breakout. No auction data available for confirmation. - UK Carbon (UKA): £60.28/tCO2 (unchanged). UKA-EUA spread narrowing to ~€15-16 range. - Policy backdrop: Biochar sector urging EU to open carbon market to permanent removals. European Parliament resistance building to plans adding international credits and removals to EU ETS. - CORSIA: Open interest in CORSIA carbon futures breached 1 million units, growing demand from aviation sector as EU extends ETS to international flights. - UK policy: New PM Burnham cutting VAT from electricity bills (saving households £45/year), demand-side measure that could marginally increase power consumption but not directly carbon price supportive. - No CTA positioning data for EUA, but the +4.16% move suggests systematic funds may have flipped to long on momentum break above €85. Oil Market - Brent front-month: $94.10/bbl (-0.13% on session, but +3.75% intraday to $94.42 before settling). WTI front-month: $86.53/bbl (-0.55%). Both near multi-week highs. - EIA inventory: Crude +2.0m barrels to 411.7m (6% below 5-year avg). Gasoline +0.8m, distillate +1.4m. Total petroleum +11.6m barrels. Builds are modest relative to seasonal norms, inventories remain tight. - Product crunch: Bloomberg reporting diesel trading at $150+/bbl equivalent, "petroleum product shortage drives diesel and gasoline prices above crude." NYMEX ULSD heating oil front-month: $4.15/gal (+0.24%). RBOB gasoline front-month: $3.42/gal (+0.29%). - Hormuz escalation: Kuwaiti tanker hit by projectile in the Strait, Brent surged above $90. Houthis threatening Red Sea blockade. Saudi oil tankers forced to U-turn in Red Sea. - Refining scarcity: Ukraine strikes on Russian refineries + Hormuz risks tightening product supply. "Product tank bottoms near" per Bloomberg, crude supply holds 2-3 months but refining capacity is the bottleneck. - CFTC positioning (WTI): Managed money net long +86,383 lots, WoW net change +11,704 (adding longs). Brent ICE: Managed money net short -16,324 lots, WoW -7,326 (adding shorts). Divergent positioning, Brent shorts at risk. - CFTC positioning (ULSD): Managed money net long +10,919, WoW +6,116 (adding longs). Market pricing in diesel/gasoline scarcity. - China: Crude imports softened (down 40% on Iranian crude per US Treasury), but gasoline/diesel exports maintained. China's oil output hit record 216m tons in 2025. - Brazil: Accelerating oil production as Asian buyers flee Middle East, Brazil grades don't require Hormuz transit. Systematic & Signals - CTA positioning (Brent ICE): Managed money net short -16,324 lots, contrarian bearish. With Brent at $94.10 and shorts at risk, any supply disruption headline could trigger forced covering. Short squeeze potential is elevated. - CTA positioning (WTI): Managed money net long +86,383 lots, aligned with bullish trend. WoW adding +11,704 longs. WTI-Brent spread narrowing as WTI catches up. - CTA positioning (Henry Hub): Managed money net short -105,501 lots, WoW adding -45,124 shorts. Heavy bearish consensus despite TTF rally, decoupling trade in play. - CTA positioning (RBOB): Managed money net long +68,951, bullish gasoline. WoW -2,592 (modest profit-taking). Product scarcity theme intact. - No systematic model signals for TTF/EUA in this dataset, but the TTF +4.95% move likely triggered trend-follow signals to long. - Trend assessment: TTF front-month in parabolic uptrend (+56.7% vs 200-day MA). Brent in uptrend (+18% vs 200-day MA). Henry Hub in downtrend (-14.5% vs 200-day MA). EUA breaking out. Geopolitics - Iran war, 10th consecutive night of US strikes on Iranian targets. Trump vowing Tehran will "pay." Iran claiming strikes on infrastructure in Bahrain, Kuwait, Jordan. - Hormuz crisis: Kuwaiti tanker Kaifan hit by projectile near Oman. Houthis threatening Bab el-Mandeb blockade, two Saudi oil tankers forced to U-turn in Red Sea. Rubio says Iran "not serious about talks." - China-Iran oil: US Treasury says China's Iranian crude purchases dropped ~40% after expanded sanctions on teapot refiners. Direct financial pressure on Tehran. - India-Russia oil: India keeps buying Russian oil at near-record pace despite expired US waiver, maintaining ~1.5m bpd of Russian crude flows. - Pakistan scrambling for oil alternatives from US, Nigeria, Singapore, central Asia, supply diversification accelerating. - UK politics: New PM Burnham appoints Miatta Fahnbulleh as energy secretary, replacing Ed Miliband. Analysts say unlikely to materially affect wholesale energy policy. Fahnbulleh previously advocated Green New Deal and opposed new oil/gas fields. - Polymarket signals: China-Philippines military clash before 2027 at 100% (Yes), +39.5pp in 24h. Iran regime fall before 2027 at 10%. Ukraine peace deal before 2027 at 24% (-0.5pp). Markets pricing elevated geopolitical risk across multiple theaters. - Enagas CEO: "Geopolitical volatility is no longer transitory but structural", this is the new baseline for energy markets.