EU gas prices start to fall sharply

UK and Dutch wholesale gas prices fell yesterday as Europe hit its target of 80% gas supplies and record prices prompted profit taking.

Despite yesterday’s plunge, the gas contract for the Dutch front month remains about 420 percent higher than this time last year.

Federal Economics Minister Robert Habeck said on Monday that he expected gas prices to fall soon.

Germany, Europe’s biggest gas consumer, is making progress on its storage targets and won’t have to pay the steep asking prices to keep replenishing supplies even as Russia tries to hit back.

“We believe that the decline could start now, thanks to the competition between financial participants to liquidate their long positions and avoid being the last idiot forced to sell at a much lower price,” said analysts at Engie’s EnergyScan.

Europe’s gas storage facility was almost 80 percent full – close to an EU target of being 80 percent full by November 1.

Russian gas flows to Europe via the Nord Stream pipeline and via Ukraine remained stable, operator data showed.

Russia will halt natural gas supplies to Europe via its main pipeline in the Nord Stream region for three days from August 31 to September 2 while it conducts maintenance work, Russian energy giant Gazprom said.

The shutdown follows a 10-day maintenance curtailment in July, and the Nord Stream pipeline was already operating at just a fifth of its capacity, fueling fears that Russia could halt inflows entirely during the winter heating season.

Another factor contributing to declining prices could be that at an emergency meeting of energy ministers on March 9, Germany

“Any measure that caps electricity prices will limit the profitability of burning gas to generate electricity, which could potentially lead to lower gas demand,” ING analysts said.

Meanwhile, France’s Engie said it had been informed by Gazprom that its gas supplies would be reduced.

On the European CO2 market, the benchmark contract lost €3.26 to €83.40 per tonne.

The UK day-ahead gas contract fell 110p to 460p/therm and the September price was 135p lower at 460p/therm.

https://www.independent.ie/business/world/eu-gas-prices-are-starting-to-fall-sharply-41948566.html EU gas prices start to fall sharply

Fry Electronics Team

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