Technical rebound amid unchanged fundamentals

Amid unchanged fundamentals, European gas prices rebounded yesterday, supported by technical buying after the previous sessions’ strong losses. Asia JKM prices (-7.74%, to €76.771/MWh, on the spot; +5.74%, to €90.793/MWh, for the December 2021 contract) and parity prices with coal for power generation (up as both coal and EUA prices were higher) sent mixed signals. On the pipeline supply side, Russian supply rebounded to 217 mm cm/day on average yesterday, compared to 210 mm cm/day on Monday, thanks to higher flows through Ukraine. Norwegian flows were stable, averaging 340 mm cm/day. 

At the close, NBP ICE December 2021 prices increased by 5.810 p/th day-on-day (+3.47%), to 173.280 p/th. TTF ICE December 2021 prices were up by €1.99 (+3.03%) at the close, to €67.606/MWh. On the far curve, TTF Cal 2022 prices were up by €1.54 (+3.46%), closing at €46.023/MWh, and widening the spread against the coal parity price (€30.849/MWh, +2.89%).

TTF ICE December 2021 prices are increasing again this morning. But this remains an upward technical correction in a context of a downtrend. As such, the rebound should be limited.