Prices up again on colder weather

European gas prices were up again yesterday, more sensitive to the drop in temperatures than to the still-comfortable pipeline supply. Indeed, Russian flows were slightly up yesterday, averaging 253 mm cm/day, compared to 251 mm cm/day on Tuesday. Norwegian flows were stable, at 319 mm cm/day on average.

Note that the Kremlin said yesterday that Russia will not immediately demand to be paid in rubles for its gas exports, promising a gradual shift. Experts from Russia and Germany are expected to discuss the issue further.

Germany on its side declared yesterday an early warning in its national gas emergency plan, paving the way for the potential rationing of deliveries to consumers in the event of supply disruption.

At the close, NBP ICE April 2022 prices increased by 19.810 p/th day-on-day (+7.52%), to 283.230 p/th. TTF ICE April 2022 prices were up by €10.59 (+9.77%), closing at €118.970/MWh. On the far curve, TTF ICE Cal 2023 prices were up by €2.20  (+3.22%), closing at €70.657/MWh.

In Asia, JKM spot prices increased by 11.60%, to €115.677/MWh; May 2022 prices increased by 0.17%, to €104.451/MWh.

TTF ICE April 2022 prices rose yesterday to the 5-day High target, before weakening. They are down this morning, probably pressured by profit taking, but the 5-day average could lend them support. Indeed, a drop towards the 5-day Low or the 20-day Low will be difficult to achieve on a fundamental point of view given the level of Asia JKM prices. Overall, we can notice that prices are still in the area in the middle of the range set by the maximum coal switching level (currently around €84/MWh) and the maximum gasoil switching level (currently around €137/MWh). A balanced position between improving stock levels and risks on future supply!