EUROPEAN GAS PRICES DOWN YET
BLOOMBERG- Oct 24, 2022 - Natural gas in Europe fell to €100 per megawatt-hour for the first time since June as warm weather, ample stockpiles and EU moves to contain the crisis ease fears over winter shortages.
Benchmark futures declined as much as 12%, and are about 70% lower from the highs of August. Warmer-than-usual temperatures are expected to remain across the continent to the end of the month, delaying the heating season and allowing storage sites to continue to be filled. High levels of liquefied natural gas imports have helped boost reserves to higher than their usual levels.
The improved conditions are easing some pressure on Europe’s battered economy. Still, prices are more than three times higher than the five-year average for the time of the year, and a bout of cold winter weather could bring back supply concerns.
“Europe is in a comfortable place concerning supplies now,” said Graham Freedman, an analyst at consultancy Wood Mackenzie. “The risks of blackouts and rationing are receding now. But the real test will be when we have cold weather.”
Dutch front-month gas futures, the European benchmark, were 11% lower at €101.51 per megawatt-hour as of 9:08 a.m. in Amsterdam. They fell 20% last week.
European Union leaders last week agreed to back urgent measures. They support a cap on the price of gas in electricity generation, and want to take steps to avoid extreme price spikes.
The bloc’s energy ministers will meet this week to continue to hash out the details. Traders will wait for more details about the design of the EU plan, especially as a price cap has previously remained elusive because of concerns it will encourage gas sellers to look elsewhere.
While the supply situation is easing, Germany will be in a much better position next winter than this one as more LNG flows into the country, Handelsblatt reported, citing Economy Minister Robert Habeck. Supplies from places including Norway and the Netherlands should make up about one-third of lost volumes of the shut Nord Stream 1 pipeline that carried shipments from Russia.
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