Mixed price evolution

European gas prices were mixed yesterday. Russian flows increased slightly, averaging 218 mm cm/day, compared to 213 mm cm/day on Tuesday. By contrast, Norwegian flows dropped to 312 mm cm/day on average, compared to 325 mm cm/day on Tuesday, due to planned maintenance. While uncertainty on the payment of Russian gas in rubles continued to lend some support, the drop in coal prices (-1.01% for API2 1st nearby prices, -1.96% for Cal 2023 prices) provided downward pressure, particularly on the far curve.

At the close, NBP ICE June 2022 prices dropped by 3.250 p/th (-1.75%), to 181.980 p/th, equivalent to €73.732/MWh. TTF ICE June 2022 prices were up by 36 euro cents (+0.39%), closing at €94.538/MWh. On the far curve, TTF ICE Cal 2023 prices dropped by €1.98 (-2.50%), closing at €77.442/MWh.

In Asia, JKM spot prices increased by 11.98%, to €72.254/MWh; July 2022 prices increased by 6.25%, to €69.003/MWh.

The drop in coal and EUA prices pulled the maximum coal switching level to €103.59/MWh yesterday (down from €106.30/MWh on Tuesday) and the average coal switching level to €79.26/MWh (down from €81.14/MWh on Tuesday). Reflecting a more comfortable spot balance (European day-ahead prices continue to trade below month-ahead prices), TTF ICE June 2022 prices are currently almost right in the middle of the range set by these two levels. The fact that they remain below the 5-day average suggests that a decline is more likely. But, for that, the market needs more clarity on the payment of Russian gas in rubles.

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