ECB will keep rates low for a long time, but didn’t we already know that?
Looking at markets’ reaction after the ECB meeting, the new forward guidance is a success: the euro is slightly weaker vs the USD (around 1.1770) and…
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European spot and near curve gas prices dropped yesterday, pressured by warmer weather and comfortable LNG and pipeline supply. Russian flows rebounded slightly yesterday, averaging 245 mm cm/day, compared to 241 mm cm/day on Friday. Norwegian flows were stable at 324 mm cm/day on average. By contrast, far curve prices were up again, supported by resilient coal prices and the feeling that the crisis will be long-lasting, which justifies the reduction of the backwardation.
At the close, NBP ICE May 2022 prices dropped by 15.530 p/th day-on-day (-6.80%), to 213.010 p/th. TTF ICE May 2022 prices were down by €3.75 (-3.61%), closing at €100.137/MWh. On the far curve, TTF ICE Cal 2023 prices were up by €1.46 (+1.91%), closing at €77.814/MWh.
In Asia, JKM spot prices dropped by 4.50%, to €94.760/MWh; May 2022 prices dropped by 1.80%, to €103.528/MWh.
The maximum coal switching level was stable yesterday around €93/MWh. Therefore, TTF ICE May 2022 prices because were able to continue their decline quietly, below the 20-day average. But, as said yesterday, the downside potential seems limited (the 5-day Low target seems out of reach) as long as coal prices and Asia JKM prices remain resilient, with an upside risk in case fundamentals tighten.