European gas prices increased again yesterday, supported by lower pipeline supply. Indeed, Norwegian flows weakened again, averaging 306 mm cm/day, compared to 313 mm cm/day on Wednesday, impacted by an additional outage, unplanned this one, at Kollsnes.
Moreover, the end of the planned maintenance at the giant Troll field has been pushed back from April 23 to April 26. On their side, Russian flows were almost stable, at 208 mm cm/day on average, compared to 207 mm cm/day on Wednesday.
At the close, NBP ICE May 2022 prices increased by 10.990 p/th day-on-day (+6.18%), to 188.870 p/th. TTF ICE May 2022 prices were up by €5.83 (+6.19%), closing at €100.061/MWh. On the far curve, TTF ICE Cal 2023 prices were up by €4.05 (+5.03%), closing at €84.573/MWh.
In Asia, JKM spot prices increased by 0.88%, to €79.838/MWh; June 2022 prices increased by 0.49%, to €79.636/MWh.
Norwegian flows are nominated down again this morning, at 269 mm cm/day on average, providing additional support to TTF ICE May 2022 prices. They rose to the 20-day average before weakening. Given the relatively weak levels of Asia JKM prices, Europe should continue to benefit from a high LNG supply, without having to overbid.
But there is a reason for concern about the sharp drop in Norwegian supply. The missing volumes are probably being sought from power plants, which are asked to favor generation from coal. With the maximum coal switching level estimated at €100/MWh yesterday (compared to €102/MWh on Wednesday), it is not surprising to see gas prices currently trading above €100/MWh.
And as we recalled in our Gas & Coal Weekly Report published yesterday, this level represents a kind of equilibrium (with now a slight upward bias) around the middle of the range set by this 5-day Low (€84.18/MWh for today) and the 5-day High (€111.42/MWh for today).