European gas prices increased again strongly yesterday, supported by ongoing concerns on supply scarcity, to which has been added the downward revision of temperatures forecasts for the coming days. The rise in Asia JKM prices (+14.37%, to €116.378/MWh, on the spot; +21.98%, to €126.161/MWh, for the December 2021 contract) and in parity prices with coal for power generation (both coal and EUA prices were up) provided additional support.
Note that Russian supply was almost stable yesterday, averaging 255 mm cm/day, compared to 254 mm cm/day on Monday. Norwegian flows weakened to 334 mm cm/day, compared to 346 mm cm/day on Monday.
At the close, NBP ICE November 2021 prices increased by 48.040 p/th day-on-day (+19.54%), to 293.910 p/th. TTF ICE November 2021 prices were up by €19.37 (+20.04%) at the close, to €116.020/MWh. On the far curve, TTF Cal 2022 prices were up by €6.56 (+11.08%), closing at €65.785/MWh, and widening the spread against the coal parity price (€45.849/MWh, +3.68%).
TTF ICE November 2021 prices continued to defy technical levels yesterday, rising significantly above the 5-day High for today. The 5-day average even increased above the 5-day High: our ultimate indicator of a technically overbought market which, statistically, has a 1% probability of occurrence.
But, obviously, we are currently living exceptional circumstances because the world gas market has never been in a situation where Asia and Europe were obliged to compete fiercely for the marginal LNG cargo available (as the latter was supposed to benefit from comfortable pipeline supply). Prices are up again this morning, but it is reassuring to see that the market doesn’t go totally crazy as it maintains a stable spread (although positive) between the 5-day average and the 5-day High.