European gas prices surged to more than two-year highs in early Tuesday trading, underpinned by anticipation of colder weather and concerns of dwindling LNG supply due to soaring Asian prices. The day-ahead Dutch TTF contract was seen up EUR 2.50 at around its highest level since November 2018, of EUR 24.75/MWh. The front-month TTF price rose EUR 2.39 to EUR 24.98/MWh – a level not seen since December 2018.
At the same time, a shortfall in prompt LNG supply continued to spur prices. Vessel arrivals to European import hubs were forecast to decline 26% this week, from expected arrivals last week, to just 1.4bcm.
JKM, the benchmark for Asian spot LNG prices, surged to an all-time high at $21.453/MMBtu on Jan. 8 amid record low temperatures in North Asia, high freight rates, congestion in the Panama Canal and supply disruptions. The West India Marker (WIM), the benchmark for spot LNG prices delivered to India, hit an all-time high at $17.925/MMBtu on Jan. 8, S&P Global Platts data showed. A leading Indian LNG importer said that the country could see LNG imports dropping to 5.5-5.7 million tonnes in Q1 2021, compared with 6.5 million tonnes in Q4 2020.
In Bulgaria the Bulgarian public gas supplier Bulgargaz said that it has proposed to the energy regulator to approve a wholesale gas price of 28.92 BGN (14.79 EUR) per MWh, to be valid in February. The price applicable in January is 26.93 BGN per MWh.
The proposal takes into consideration the 16% increase in gas prices on the European markets in the December 31, 2020 – January 8, 2021 period, the company said in a statement on Monday.
Bulgargaz will update its price proposal for the second month of the year on February 1. Bulgargaz is also planning to subsequently propose a further increase in the price valid in March, to 30.22 levs per MWh. The final price proposal for the month of March will be submitted within next month.