News. Dutch TTF spot gas prices exceed $2,000/mcm.
Commentary. Gas prices on the TTF exchange have held above $2,000/mcm for the second day, although today they are slightly off yesterday’s new ATH of $2,200/mcm. The main reason for the rally in gas prices is Gazprom's refusal to book extra transit capacity via the Ukrainian Gas Transport System (GTS) in January and the lack of volumes for several days via the Yamal-Europe gas pipeline via Poland. Gazprom cannot directly impact market prices since rises and falls depend to a large extent on the mood of speculatively-minded traders.
Gazprom's reluctance to boost transit capacity has been spawning rumors in the European media that the gas giant intends to “freeze” Europe until Nord Stream 2 is certified. However, this is not the case, since back in November, Gazprom pumped large volumes of gas into Europe’s underground gas storage facilities, thereby doubling the volume of transit through the Yamal-Europe gas pipeline. Now the gas reserves in Europe’s underground storage facilities are sufficient, and apparently would even be sufficient, say, for Germany to reverse gas supplies to Poland. So now, the point is not that Gazprom is acting in its own interests, but rather that European consumers are acting solely in what they believe to be their own best interests by not ordering additional volumes of gas supplies in Russia, while continuing to "throttle" the gas market.
Market reaction. The price of Dutch TTF spot gas is hovering around $2,000/mcm today, off yesterday’s peak.
Forecast. Gas prices could fluctuate in the range of $1,900-2,300/mcm until the end of 2021.