The European gas market remains very nervous. Last week, the supply of additional LNG from the United States caused prices to fall, but this week, traders and analysts are once again looking east. The mood has immediately swung to the other side.
In the last days of the year, the price decline on the TTF continued, closing at €31 per MWh on Friday, December 70,34. That trend has not continued this week. During the first trading days of the new year, the price rose by more than 30%, to €93 per MWh on Wednesday, January 5. The direct reason for the increased gas price is the disappointing supply from Russia. Gas is pumped from Germany to Poland via the Yamal pipeline for the sixteenth day in a row, instead of gas being supplied from the east. Supply via the pipeline in Ukraine continues to decline and, according to data from grid operator Eustream, is now below the level of December.
More gas output
Gazprom announced on Sunday, January 2, that it exported 5,8 billion cubic meters more to countries outside the former Soviet Union last year than in 2020. That brings exports to 185,1 billion cubic meters. Germany was the most important growth market (+10,5%). Turkey (+63%) and Italy (+20,3%) are below in the rankings. The company has not made a further breakdown, but the target of exporting 2021 cubic meters to Europe and Turkey in 183 does not appear to have been achieved. The export figure also includes exports to China. That country already purchased 7,1 billion cubic meters in the first three quarters.
As one of the most important coal exporters, Indonesia is indirectly causing additional unrest on the gas market. The Indonesian authorities announced on Saturday, January 1, that they will limit coal exports for January to prevent the country itself from running into a shortage. Indonesian coal is important in the energy supply of countries such as China, India, Japan and South Korea. Analysts and European traders fear that LNG ships now sailing to Europe will change course due to energy shortages on the Asian market - and therefore higher prices.