The price of European natural gas continued on Tuesday the downward trend of recent trading days and fell further below 100 euros per megawatt hour (MWh). The price on the TTF, a virtual trading point for Dutch natural gas, fell by about four percent in the morning to 94.59 euros per megawatt hour. Due to its size, the TTF is the benchmark for the European price level. The low prices will not go down well with end customers, at least for the time being.
Gas prices have been falling since late last week, with the Title Transfer Facility (TTF) falling below $100 for the first time since June earlier in the week. Since the beginning of this month, the price of European gas has fallen by almost 50 percent. The quote reached a record high of 342 euros per megawatt hour at the end of August. A cessation of the supply of natural gas from Russia caused a rapid increase in the price of natural gas at that time.
Mild weather, full storage
The market pointed to the mild autumn temperatures, which keep natural gas consumption low – the heating season has not yet fully started. In addition, the gas storage tanks are completely full. Analyst Andreas Steno Larsen also pointed out on Twitter that European countries ordered very large quantities of liquefied gas after the European Commission asked states in June to build up reserves. But with no more storage space available, tankers are currently waiting for unloading. As a result, the gas price could fall further.
If gas is in abundance and the price is falling, why doesn’t that resonate with consumers shivering from the high bills? Experts point out that reported gas prices relate to short-term deliveries, which are currently affected by the high temperatures and full storage facilities. This does not affect long-term contracts.
Long-term development is crucial
Christoph Dolna-Gruber of the Austrian Energy Agency (AEA) also points out that prices for futures – long-term futures transactions – have also fallen, but not by much. These are more relevant to the prices of end customers, he explains on Twitter.
Despite the recent easing, the price of European natural gas is still at a relatively high level. In 2020, the TTF was still below 20 euros.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
