European gas prices increased again yesterday

European gas prices increased again yesterday, still supported by cold weather and concerns on Nord Stream 2. The strength in Asia JKM prices (+6.47%, to €109.571/MWh, on the spot; +0.80%, to €110.330/MWh, for the January 2022 contract) helped accompany the bullish momentum. On the spot pipeline supply side, Norwegian flows were almost stable yesterday, at 343 mm cm/day on average, compared to 344 mm cm/day on Tuesday. Russian supply was slightly down, to 285 mm cm/day on average, compared to 288 mm cm/day on Tuesday. 

At the close, NBP ICE December 2021 prices increased by 6.320 p/th day-on-day (+2.76%), to 235.370 p/th. TTF ICE December 2021 prices were up by €3.06  (+3.36%) at the close, to €93.984/MWh. On the far curve, TTF Cal 2022 prices were up by €1.78 (+3.27%), closing at €56.157/MWh, with the spread against the coal parity price (€40.170/MWh, +5.30%) narrowing.

Amid weak intraday volatility, TTF ICE December 2021 prices closed yesterday above the 5-day average and the 20-day High levels. But some bulls may estimate that yesterday move in Asia JKM prices was just a flattening of the near curve and doesn’t indicate strong buying interests by Asian actors. In any case, prices are correcting downwards this morning. But, given the spread with JKM prices, the downside potential seems limited, with the 5-day average as strong support level. If this support is broken, prices have an intermediate support (before the 5-day Low) at €85.042/MWh.