EnergyScan

Prices up as geopolitical tensions increase

European gas prices rebounded strongly yesterday, inflated by the rise in the risk premium on the Ukrainian crisis. Indeed, after President Putin recognized eastern Ukraine’s Donetsk and Luhansk regions as breakaway states, Europe and the USA have decided to apply a series of sanctions against Russia. In particular, German Chancellor Scholz said that the Nord Stream 2 gas pipeline could not now be certified. The rise in Asia JKM prices (+7.61% on the spot, to €77.351/MWh) helped accompany the bullish momentum. On the spot pipeline supply side, Norwegian flows weakened slightly yesterday, averaging 340 mm cm/day, compared to 344 mm cm/day on Monday. Russian supply was slightly higher, averaging 185 mm cm/day, compared to 182 mm cm/day on Monday.

At the close, NBP ICE March 2022 prices increased by 17.460 p/th day-on-day (+10.06%), to 190.990 p/th. TTF ICE March 2022 prices were up by €7.23 (+9.96%), closing at €79.789/MWh. On the far curve, TTF ICE Cal 2023 prices were up by €5.44  (+10.53%), closing at €57.026/MWh.

>Energyscan gas news

TTF ICE March 2022 prices closed yesterday around the 5-day High target. They are trading above this level this morning, a move that can no longer be considered as arising from the normal market volatility. Indeed, a real bullish trend is building, as shown by the upward slope of the 5-day average. In the very short term, prices could rise towards the 20-day High target. Note that this level has a fundamental meaning. Without Nord Stream 2 (so, very little hope of having additional Russian gas volumes), the European gas balance will continue to need to limit gas demand in the power generation sector (ie to maintain gas prices above coal switching levels) for sure, but also to replace gas with oil products wherever possible. The spot gasoil substitution range is currently estimated between €91/MWh and €110/MWh. The bad news is that the Ukrainian crisis also leads this gasoil range to move upwards.

Share this news :
Share on twitter
Share on linkedin
Share on email

You might also read :

ES-gas
September 17, 2021

Strong downward correction in Europe

European gas prices dropped significantly yesterday, pressured by more comfortable pipeline supply and profit taking after the previous sessions’ strong gains. Russian flows were stable…
ES-gas
July 8, 2021

Prices continued to correct downward

European gas prices continued to correct downward yesterday, further reducing their premium over parity prices with coal for power generation. They ignored the additional drop…
ES-power
January 21, 2021

EUAs retreated after an early jump

The European power spot prices continued to fade yesterday amid forecasts of milder and windier weather. Prices hence eroded 5.05€/MWh to 38.89€/MWh in France, Germany,…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?  Sign up here!

[booked-calendar]