Prices strongly up after Russia cut supplies to Poland

European gas prices increased strongly yesterday after PGNiG, the state-controlled Polish company, said Russian gas supplies to Poland under its long-term contract with Gazprom were to be completely suspended from April 27 after it refused to settle its bills in rubles. Obviously, this decision by Gazprom has raised serious concerns about the future of Russian flows to the other countries. On the spot pipeline supply side, Russian flows dropped yesterday, averaging 207 mm cm/day, compared to 219 mm cm/day on Monday. Norwegian flows were stable, at 305 mm cm/day on average.

At the close, NBP ICE May 2022 prices increased by 10.170 p/th day-on-day (+6.63%), to 163.560 p/th. TTF ICE May 2022 prices were up by €10.37 (+11.17%), closing at €103.208/MWh. On the far curve, TTF ICE Cal 2023 prices were up by 71 euro cents (+0.88%), closing at €80.842/MWh.

In Asia, JKM spot prices dropped by 8.59%, to €71.714/MWh; June 2022 prices dropped by 0.88%, to €80.187/MWh.

Data from the European Union gas transmission operators showed Russian gas supplies to Poland were halted briefly this morning, and it will be necessary to monitor how they evolve during the day. This event is exactly the kind of fundamental element we mentioned yesterday could reverse the price trend. Indeed, TTF ICE May 2022 prices broke yesterday the resistance of the 20-day average, and this morning they are breaking that of the 5-day High. If the resumption of Russian flows to Poland is confirmed, prices could drop below this 5-day High. Otherwise, a rise towards the 20-day High (and even the 1-Year High if market participants believe some other European countries could be affected) is likely.