Prices weakened on bearish spot fundamentals

European gas prices weakened again on Friday, pressured by weak demand and comfortable supply. While Russian flows were stable, averaging 227 mm cm/day, Norwegian flows were up, to 325 mm cm/day on average, compared to 320 mm cm/day on Thursday. However, the rise in coal prices (+4.61% for API2 1st nearby prices, +4.01% for Cal 2023 prices) contributed to limit losses, particularly on far curve prices.

At the close, NBP ICE June 2022 prices dropped by 20.780 p/th (-12.31%), to 147.960 p/th, equivalent to €59.917/MWh. TTF ICE June 2022 prices were down by €3.12 (-3.43%), closing at €87.902/MWh. On the far curve, TTF ICE Cal 2023 prices dropped by 81 euro cents (-1.05%), closing at €75.708/MWh. 

In Asia, JKM spot prices increased by 4.76%, to €70.024/MWh; July 2022 prices increased by 0.41%, to €70.521/MWh; August 2022 prices increased by 2.07%, to €75.206/MWh.

The rise in coal prices drove the coal switching range up. But, European power markets are currently comfortable enough to reduce the call to thermal generation. As a consequence, the equilibrium level for gas prices (from the perspective of power generation) should drop and settle around we can call the summer coal switching level (see the Gas & Coal Weekly Report published on Friday), which is currently around €75.27/MWh on the month-ahead. For the moment, TTF ICE June 2022 prices maintain their downtrend, inside a range whose the S1 level provides the support. In the absence of a major fundamental event, the summer coal switching level could be the target, knowing that Asia JKM prices should prevent prices from falling too much anyway.

Share this news :

You might also read :

ES-economy
December 13, 2021

Central bank week

All major central banks and even the Bank of Russia or the Bank of Turkey are meeting this week. The Bank of Turkey is expected…
ES-power
March 25, 2022

EUA clawed back losses amid low liquidity

The European power spot prices inched up yesterday as the expectations of lower French nuclear availability offset the forecasts of stronger wind output and weaker…
ES-gas
January 29, 2021

European prices rebounded

Prices rebounded yesterday in most European gas markets, supported by new weather forecasts pointing to below-average temperatures in February. To the exception of Spain PVB…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet? 

[booked-calendar]