Cal 2022 prices continue to increase

European spot gas prices were mixed yesterday, amid almost unchanged fundamentals. Norwegian flows were up yesterday, averaging 350 mm cm/day, compared to 344 mm cm/day on Friday. Russian supply was almost stable, at 281 mm cm/day on average, compared to 280 mm cm/day on Friday. Moreover, the moderation in Asia JKM prices (-2.30% on the spot, to €101.067/MWh; +0.85% for the January 2022 contract, to €103.997/MWh) continued to limit the upside on spot and Q1 2022 prices. By contrast, prices on the other quarters of 2022 were more clearly up, supported by growing concerns on low European stock levels.

At the close, NBP ICE January 2022 prices increased by 1.180 p/th day-on-day (+0.52%), to 230.080 p/th. TTF ICE January 2022 prices were up by 45 euro cents (+0.50) at the close, to €89.928/MWh. On the far curve, TTF Cal 2022 prices were up by €2.42 (+4.25%), closing at €59.309/MWh, with the spread against the coal parity price (€38.017/MWh, +2.79%) widening.

TTF ICE January 2022 prices are up this morning (close to the R1 level), supported by the colder revisions in Western Europe temperature forecasts and also current freezing temperatures in Russia. Cal 2022 prices are even more bullish, rising to the 5-day High. Although profit taking by financial participants could help to calm the upward pressure, their trend is now clearly bullish, fueled by the expected gradual closure of the spread between Q1 2022 prices and Q2/Q3/Q4 2022 prices (as low gas levels suggest a strong injection season).