Prices down following the discovery of a new variant of the Covid-19

European gas prices dropped on Friday as the discovery of a new variant of the Covid-19 caused widespread panic in energy markets. But, compared to oil and coal, the decline in gas prices was relatively moderate. In Asia, JKM spot prices dropped by 1.12%, to €106.275/MWh; January 2022 prices dropped by 4.7%, to €105.196/MWh. On the pipeline supply side, Norwegian flows were very slightly up on Friday, at 350 mm cm/day on average, compared to 348 mm cm/day on Thursday. The same for Russian supply, which averaged 284 mm cm/day, compared to 283 mm cm/day on Thursday.

At the close, NBP ICE December 2021 prices dropped by 11.580 p/th day-on-day (-4.96%), to 222.080 p/th. TTF ICE December 2021 prices were down by €5.42 (-5.82%) at the close, to €87.772/MWh. On the far curve, TTF Cal 2022 prices were down by €2.99 (-5.29%), closing at €53.553/MWh, with the spread against the coal parity price (€37.513/MWh, -5.86%) widening.

The bullish bias we mentioned last Friday did not resist the selling pressure coming from the new variant of the Covid-19. But the S1/R1 range held, with the S1 level lending support to TTF ICE December 2021 prices. For their last day of trading, they are rebounding strongly this morning. The R1 level should set a resistance, but it is not excluded that last minute buying push prices up to the 5-day High.