Mixed price evolution

European gas prices were mixed yesterday, torn between conflicting fundamentals. On the pipeline supply side, Norwegian flows weakened again, to 311 mm cm/day on average, compared to 322 mm cm/day on Monday. By contrast, Russian flows were higher, to 256 mm cm/day on average, compared to 250 mm cm/day on Monday. Asia JKM prices (+0.41%, to €100.125/MWh, on the spot; +1.97%, to €100.658/MWh, for the December 2021 contract) and parity prices with coal for power generation (slightly down as the drop in coal prices offset the rise in EUA prices) sent mixed signals.

At the close, NBP ICE November 2021 prices dropped by 1.640 p/th day-on-day (-0.73%), to 221.590 p/th. TTF ICE November 2021 prices were down by 15 euro cents (-0.17%) at the close, to €88.493/MWh. On the far curve, TTF Cal 2022 prices were up by 44 euro cents (+0.80%), closing at €55.529/MWh, and widening the spread against the coal parity price (€34.455/MWh, -0.55%).

TTF ICE November 2021 prices closed again yesterday below their 5-day average, confirming their current short term (slight) downtrend. Norwegian flows are up this morning (to 322 mm cm/day) and China coal prices continued to weaken today. The 5-day average could therefore continue to set a resistance. However, given the European fundamental situation (weak stock levels and uncertainty on Russian supply for the coming months) and the higher levels of Asia JKM prices, a rise towards the 20-day average or the 5-day High cannot be totally excluded.