2023-05-21 04:42:58
This is a first since the start of the conflict in Ukraine: the price of natural gas in Europe has fallen to its lowest level since the Russian invasion. It is now ten times cheaper than in August. For what? Here are the main factors that explain this decrease.
The price of gas has never been so low for two years: €30 per megawatt/hour on its reference market in Europe. The decrease is explained in particular by the fall in gas consumption by households, ie -14.5% compared to the previous winter. The finding is similar in industry. “The growth is quite weak. Because of the increase in interest rates, we are in a growth of around 1.5%, no more. So there is less demand from industry as well. This do that […] prices are trending down“, explains Bertrand Candelon, professor of international finance at UCLouvain.
Last August, as a result of the war in Ukraine, the price of gas rose to €350 per megawatt hour. In the meantime, supply sources have diversified, bringing calm to the markets. “We must remain cautious. We are in a phase where the price is falling, so good. We hope this will affect our bills at the end of the month. But it may be that a shock, we don’t know, something that happens, recreates a tension. Not necessarily in Russia, but recreates tension on the price of raw materials. Historically, we see that it is very volatile“, nuance Bertrand Candelon.
In short, the price of gas has returned to a lower level, but it is still twice as high as in 2019.
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