Prices down on the spot and the near curve, up on the far curve

European spot and near curve gas prices dropped yesterday, pressured by warmer weather and comfortable LNG and pipeline supply. Russian flows rebounded slightly yesterday, averaging 245 mm cm/day, compared to 241 mm cm/day on Friday. Norwegian flows were stable at 324 mm cm/day on average. By contrast, far curve prices were up again, supported by resilient coal prices and the feeling that the crisis will be long-lasting, which justifies the reduction of the backwardation.

At the close, NBP ICE May 2022 prices dropped by 15.530 p/th day-on-day (-6.80%), to 213.010 p/th. TTF ICE May 2022 prices were down by €3.75 (-3.61%), closing at €100.137/MWh. On the far curve, TTF ICE Cal 2023 prices were up by €1.46 (+1.91%), closing at €77.814/MWh.

In Asia, JKM spot prices dropped by 4.50%, to €94.760/MWh; May 2022 prices dropped by 1.80%, to €103.528/MWh.

The maximum coal switching level was stable yesterday around €93/MWh. Therefore, TTF ICE May 2022 prices because were able to continue their decline quietly, below the 20-day average. But, as said yesterday, the downside potential seems limited (the 5-day Low target seems out of reach) as long as coal prices and Asia JKM prices remain resilient, with an upside risk in case fundamentals tighten.