The gas price continues to fall and falls below the mark of 200 euros for the megawatt hour (TTF Future, October Contract) – this also pulls down the price of electricity. This means that the gas price is significantly lower than on Friday last week the message by Gazprom about the non-resumption of gas supplies by Nord Stream 1.
Gas price falls – the reasons
Of the gambit of Putin, which initially led to a sharp rise in gas prices, does not appear to have had any lasting effect. One of the reasons for the falling gas price is the continued increase in filling levels in German gas storage facilities (As of 06.09 at 86.84%). Even more important, however, are likely to be the measures announced by the EU to combat the energy crisis, which will put further pressure on the gas price as well as the price of electricity, as Bloomberg reports:
European natural gas prices fell to their lowest level in almost a month as politicians consider how to intervene in regional markets and stem the unprecedented energy crisis that is threatening the broader economy. The benchmark futures fell by up to 8.3% and slipped below 200 euros per megawatt hour for the first time since the beginning of August.
The European Union on Friday will discuss plans to intervene in markets to ease mounting stress caused by rising collateral (margin) requirements as companies call for government aid. EU officials may also consider a proposal to limit the price of Russian gas imports – and possibly even LPG – and propose targets to reduce demand.
EU prices fall on prospect of EU intervention in markets
Europe has already stocked up for the winter: storage is 82.5% full and feed-ins will continue through October.
“Fortunately, inventories for this winter are healthy and relatively well-stocked,” said Anatol Feygin, chief commercial officer at US LNG exporter Cheniere Energy Inc. “A lot depends on the weather, but we’re optimistic that this winter.” there will be enough flexibility and enough solutions.”
Still, some demand management will be needed,” he said in an interview at the Gastech conference in Milan this week.
Traders are also focused on next winter, when Europe is likely to need large supplies again amid bleak prospects for a resumption of Russian gas supplies. Additionally, China’s currently subdued demand for the fuel will not last, which could eventually pull LNG out of Europe.
“Gazprom’s Nord Stream 1 pipeline indefinite halt means structural gas supply shortages in Europe, with prices set to remain significantly higher compared to their five-year average,” said Patricio Alvarez, an industry analyst at Bloomberg Intelligence, in a message.
Dutch front month gas, a benchmark for Europe, was trading 5.1% lower at 203 euros per megawatt-hour as of 9:43 am in Amsterdam, falling for the third straight day. The corresponding price in the UK fell by 1.4%.
The German benchmark electricity price for next year thus continued the loss of the last few days and is 1.2% lower at 515 euros per megawatt hour.
FMW/Bloomberg
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