Markets already waiting for Jackson Hole?
US equity markets have reached new all-time highs, underlining how fundamentally optimistic they remain. But more mixed Asian markets, the slight rise in bond yields…
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European gas prices extended gains yesterday, after Gazprom booked less than half of the monthly transportation capacity offered at the Mallnow entry point from October: 28 mm cm/day booked out of the 85 mm cm/day that was offered. Although Gazprom can still book additional transport capacity through daily auctions, the price reaction was immediate: prices jumped towards the levels of Asian JKM prices (which were up themselves: +5.10% on the spot, €74.711/MWh, +8.74% for the November 2021 contract, to €79.113/MWh) as the market knows that without additional Russian supply, European buyers will have to compete fiercely with their Asian counterparts to attract the needed LNG cargoes.
On the spot supply side, Russian flows were almost stable yesterday, averaging 317 mm cm/day, compared to 318 mm cm/day on Friday. Norwegian flows were down, to 290 mm cm/day on average, compared to 299 mm cm/day on Friday.
At the close, NBP ICE October 2021 prices increased by 26.850 p/th day-on-day (+16.49%), to 189.650 p/th. TTF ICE October 2021 prices were up by €10.21 (+15.69%) at the close, to €75.317/MWh. On the far curve, TTF Cal 2022 prices were up by €3.02 (+7.55%), closing at €43.064/MWh, and widening the spread against the coal parity price (€35.189/MWh).
The trend remains bullish for European gas prices and additional increases are likely. However, after yesterday’s strong rise, profit taking by financial participants and technical resistances could contribute to limit gains today.