Prices up as uncertainty remains on the payment in rubles

European gas prices were up yesterday, supported by the uncertainty on the payment of Russian gas in rubles. After Brussels released on Monday updated guidance on how companies can legally keep buying Russian gas, a European Commission spokesman said yesterday opening accounts in rubles at a Russian bank to pay for gas would breach the bloc’s sanctions against Moscow.

The rise in coal prices (+6.20% for API2 1^st nearby prices, +4.53% for Cal 2023 prices) provided additional upward pressure.

At the close, NBP ICE June 2022 prices increased by 12.970 p/th (+7.53%), to 185.230 p/th, equivalent to €75.069/MWh. TTF ICE June 2022 prices were up by €1.32 (+1.42%), closing at €94.175/MWh. On the far curve, TTF ICE Cal 2023 prices increased by €1.63 (+2.10%), closing at €79.426/MWh. 

In Asia, JKM July 2022 prices dropped by 0.85%, to €64.946/MWh.

The rise in coal prices pulled the maximum coal switching level to €106.30/MWh yesterday (up from €102.00/MWh on Monday) and the average coal switching level to €81.14/MWh (up from €77.79/MWh). This offered upside potential to TTF ICE June 2022 prices which finally did not manage to break below the S1 support level. As long as there is no clarity on the payment in rubles, this support could hold and prevent prices from falling towards the average coal switching level.