European gas prices were mixed yesterday, torn between concerns on Russian supply after auction results for November gas transport capacity indicated that Gazprom did not intend to increase its deliveries via Ukraine and Poland (see news) and profit taking. Asia JKM prices (-2.09%, to €105.358/MWh, on the spot; +0.21%, to €100.933/MWh, for the December 2021 contract) and parity prices with coal for power generation (down as both coal and EUA prices dropped) sent mixed signals.
On the pipeline supply side, Russian flows were almost stable yesterday, averaging 259 mm cm/day, compared to 260 mm cm/day on Friday. Norwegian supply was up, to 350 mm cm/day on average, compared to 346 mm cm/day on Friday.
At the close, NBP ICE November 2021 prices increased by 2.960 p/th day-on-day (+1.26%), to 237.320 p/th. TTF ICE November 2021 prices were up by 29 euro cents (+0.30%) at the close, to €93.933/MWh. On the far curve, TTF Cal 2022 prices were up by 65 euro cents (+1.17%), closing at €56.474/MWh, and widening the spread against the coal parity price (€37.767/MWh, -4.58%).
Strongly up after the results of the auctions, TTF ICE November 2021 prices weakened afterwards, closing at the 5-day average level. Prices are down this morning, trading slightly below the 20-day average. The European gas balance is too tight (weak Russian supply means European buyers are obliged to continue to compete with their Asian counterparts to attract LNG cargoes) to justify the birth of a downtrend.
Therefore, the 20-day average and the 5-day Low could continue to lend strong support. But a commercial startup of Nord Stream 2 in the coming days (yesterday, the operator of the pipeline said the first string had been filled with technical gas) would completely change the situation.