German/Dutch review: Prompt reaches substantial highs as continent freezes
As the continent continues to experience temperatures well below the seasonal norm, prices have been bullish for most of the week at the TTF and German hubs. But this trend eased by Thursday, as recent highs were seen as unsustainable.
Last Friday, TTF prompt and curve moved in opposite directions as the former received some support from cooler weather predictions, and the latter fell amidst the news of US President Barack Obama's bank trading activity curbing plan. In Germany, prices were flat, as the bearish news was ignored. NCG and GASPOOL Day-ahead contracts finished the session flat to each other, a value that was slightly below that seen at the TTF counterpart.
The TTF opened strongly on Monday, and the prompt gained value substantially, due to developments at the NBP, influenced by the prediction of a prolonged drop in temperatures over and above the falling oil price.
On Tuesday, TTF prices strengthened on the back of colder weather. Developments at the US Henry Hub, where prices were falling amid warmer weather predictions, coupled with Europe's cold weather, saw the spread between contracts in these regions widen. The German spot market remained supported by cold temperatures.
On Wednesday, the TTF was volatile, seeing some record highs for recent months across various products, only to dip back down again at the end of play.
German prices were strong, as the country was caught up in the cold snap that provided substantial support to gas contracts at both the NCG and GASPOOL. Some thought that the temperature-related bullishness on these markets would not last, as they had reached unsustainable highs - despite prolonged cold weather.
Predictions were proved right, as a bearish note characterised markets on Thursday. GASPOOL's Day-ahead lost almost €2/MWh - the largest drop on any European contract for the day. MLDB
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