European gas prices increased yesterday, supported by strong demand due to cold weather and lower pipeline supply. Indeed, Norwegian flows were down yesterday, at 339 mm cm/day on average, compared to 346 mm cm/day on Tuesday. The same for Russian supply, which averaged 281 mm cm/day, compared to 286 mm cm/day on Tuesday. However, the moderation in Asia JKM prices (-5.23% on the spot, to €106.260/MWh; -0.02% for the January 2022 contract, to €108.177/MWh) contributed to limit the price rise.
At the close, NBP ICE January 2022 prices increased by 6.220 p/th day-on-day (+2.61%), to 244.530 p/th. TTF ICE January 2022 prices were up by €3.16 (+3.42%) at the close, to €95.675/MWh. On the far curve, TTF Cal 2022 prices were up by €1.34 (+2.43%), closing at €56.597/MWh, with the spread against the coal parity price (€37.259/MWh, +6.88%) narrowing.
TTF ICE January 2022 prices closed yesterday around the R1 resistance level. They are down this morning, probably pressured by profit taking. But in a context Europe still needs significant LNG volumes (as Russian supply remains low), the strong levels of Asia JKM prices should limit the downside potential. Therefore, the 5-day average should lend support; if it is broken, the decline should still stop at the S1 level.
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