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It may not last, but gas prices have been falling since this summer in Europe. A decline linked to good stocks and slowing demand.
We are still well above the usual prices of 30 euros per Mwh, but we have indeed moved away from the peaks of 200 euros in March and August. Prices for immediate gas delivery now fluctuate between 100 and 150 euros per Mwh. This decline is also found in the prices of what are called futures contracts, that is to say for a subsequent sale.
One of the first factors that explains this drop is the stocks of European countries. ” Everyone did their best to get rid of dependence on Russian gas as quickly as possible “Summarizes an expert. According to the latest figures, these stocks are more than 92% full, more than the average target of 80% set for November 1. The fear of a short-term gas shortage has therefore faded.
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Slowing down demand
The mild temperatures in October in several countries are also affecting demand, which was already down due to a reduction in industrial activity.
Another factor that may be holding back the surge in prices is Europe’s desire to control market fluctuations by setting up mechanisms to avoid extreme prices. ” These proposals – which will be examined this Thursday and Friday by the Heads of State and Government of the Twenty-Seven – have probably calmed speculators “comments an analyst.
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Uncertain coming months
If the current conjunction is very favorable to a fall in prices, that does not mean that it will last all winter. It would be enough for the United States to decide to sell less liquefied natural gas to Europe under pressure from the Americans who are seeing prices gradually rise there too. Or that there is a problem with one of the big suppliers such as Nigeria, Qatar or Algeria.
Especially since Beijing no longer wants its LNG importers such as PetroChina and Sinopec to resell their stock to Europeans in need. As winter approaches, orders have been given to keep all the gas that is imported for domestic consumption.
Caution is therefore called for. Nobody ventures to say what the price of gas will be next spring, in Europe, when it will be necessary to fill the storage once more.