Prices continued to rebound

European gas prices continued to rebound yesterday, supported by uncertainty on the level of Russian flows for the coming months after President Putin said Russia is prepared to increase gas supplies to Europe if it receives requests for more gas from its customers (via long term contracts?). The rise in Asia JKM prices (+3.97%, to €104.536/MWh, on the spot; +7.07%, to €105.379/MWh, for the December 2021 contract) also provided support.

On the pipeline supply side, Russian flows weakened slightly to 261 mm cm/day on average, compared to 265 mm cm/day on Tuesday. Norwegian supply was slightly up, to 344 mm cm/day on average, compared to 341 mm cm/day on Tuesday.

At the close, NBP ICE November 2021 prices increased by 18.630 p/th day-on-day (+8.58%), to 235.750 p/th. TTF ICE November 2021 prices were up by €7.92 (+9.24%) at the close, to €93.616/MWh. On the far curve, TTF Cal 2022 prices were up by €1.85 (+3.62%), closing at €52.841/MWh, and widening the spread against the coal parity price (€39.228/MWh, -0.75%).

TTF ICE November 2021 prices closed yesterday at the 20-day High level, raising hopes that the market remains in a wait-and-see position at least until the monthly auctions of transportation capacity next Monday. But, prices are strongly up this morning, breaking the resistance of the 20-day High and the 5-day High. The market seems to consider that the renewal of the historical partnership Putin is asking for from Europeans (with a clarification on the role of gas in their energy mix) could take time to materialize to resolve the short-term problem they are facing. Therefore, although profit taking by financial participants can still pull prices below their technical resistances, the risk seems to be upward now, particularly as Asia coal prices continued to rise today.

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