Because the price of gas in Europe is falling

Because the price of gas in Europe is falling
Because the price of gas in Europe is falling

The gas price in Europe it remains under special observation and could now surprise on the downside, according to some analyses.

Overall, European prices continued to show declines, especially as supply risks diminished amid weak demand for fuel.

Milder temperatures than usual, storage facilities 94% full, Australian strikes towards a solution are the main factors that suggest a more optimistic future for Europe and the availability of fuel at normalized costs.

However, even with gas prices now fallingthe sector remains subject to turbulence and vulnerable to any changes in both supply and demand.

Gas prices drop in Europe for these reasons

Dutch monthly futures, the benchmark for gas in Europe, are trading at 35 euros per megawatt houran acceptable level and decreasing to the 37 euros reached just a few days ago.

The overall picture has become more encouraging. Temperatures remain mild across the region European, limiting the gas consumption with the heating season still a few weeks away. Additionally, inventories are more than 94% full, well above the seasonal average, providing a buffer for any immediate supply threat.

Norway’s giant Troll field, crucial to European supplies, is ramping up production, albeit with some delays. Guidance is now expected on September 22, when an Australian labor regulator will hold a hearing into strikes at Chevron Corp.’s liquefied natural gas plants in the country. An interruption in LNG supplies could shrink the market global fuel economy.

Analysts are focusing primarily on weather conditions, with high temperatures likely to contribute alleviate fears of supply risk have emerged around the world in recent weeks, just as the region prepares to face a second winter without a large chunk of Russian gas.

October usually marks the start of the heating season in Europe, but last year’s warm weather prolonged the filling of gas storage sites that created a crucial buffer for the colder months. Stocks are now already 94% full and the delay in heating demand will leave room to store fuel arriving via pipelines or tankers.

“Prices could still fall substantially in the coming weeks”said Citigroup Inc. strategist Anthony Yuen. “A late start to winter would strengthen the price decline”.

The European winter as a whole is expected to be warmer and wetter than average. Copernicus data reports a greater than 50% chance of significantly above-average temperatures in the UK, France, Austria, Italy and parts of Germany between December and February. The likelihood of mild weather is even greater on the Iberian Peninsula.

Meanwhile, European gas prices have fallen by around 80% over the past year and the region seemed well supplied, although risks – from strikes in Australia to extended maintenance in Norway – kept the market on edge. “Large inventories mean there is less threat of price spikes before winter”Goldman Sachs Group Inc. said.

“The situation is certainly much more stable than last year. I don’t think we are in the same situation as last winter. Frankly, everything that needs to be done has been done.” said Jonathan Brearley, chief executive of British energy regulator Ofgem.

Optimism, however, remains very cautious.

Why Europe must remain alert on gas

Even in a mild winter, any supply disruptions could still cause temporary spikes in gas prices, hitting European inflation most of all.

An unplanned outage at the Freeport LNG plant in the United States this week and prolonged maintenance in Norway – along with short-term problems – are for example increasing the market volatility.

A few weeks ago, Simone Tagliapietra, senior member of Bruegel, an economic think tank, reminded us that volatility has not disappeared forever: it has simply become more manageable.

“Although prices are now much lower than last year, remain volatile. And whatever happens on the supply or demand side can have an impact and cause the price to fluctuate quite strongly on a daily or weekly basis. This is part of a new normal for the European gas market”he said in an interview with Euronews.

PREV Wireless charger at an ABSURD PRICE, on Amazon €8.99
NEXT Vincent Cassel, the new girlfriend lookalike of ex Tina Kunakey: the photos