Gas prices in Europe plummeted again on Thursday, continuing recent sales, as mild weather reduced demand and new oil supplies to the region.
With a small holiday trade, the future of TTF-connected gas, oil prices in Europe, dropped to 12% to € 84.90 per hour megawatts when natural gas tanks – bound for Asia – reached Europe.
These ships were was updated earlier this month and traders to raise money on quoted prices, which rose above € 180 per hour megawatts near Christmas due to a lack of Russia’s growing confidence.
Alex Froley, an LNG expert at ICIS, said LNG gas carrier Rosenrot left the US on the way to China but changed Thursday and headed for the Netherlands.
“The mild climate and high levels of LNG have helped to lower prices last week,” he said. “However if there is a cold season in Europe or Asia in the remaining winter months, the market may be back.”
In the UK, the price of ordinary oil fell 10 percent to 210 percent on Thursday, boosting losses from last week’s record of 450 pence per therm to 50 percent.
Despite the decline, gas prices in Europe continue to rise by 350 percent this year, increasing the cost of electricity to households and factories across the continent and increasing inflation pressure.
Kaushal Ramesh, a senior analyst at Rystad Energy, said the European market was “stable” due to the 800,000 tons of LNG spread over 11 ships shipped from Asia to Europe.
However, he said oil markets “were not out of the woods here” and ran a major pipeline between Russia and Europe alternately for a week and a half.
“The translation of LNG from Asia is an effective way to reduce gaps but it is not a substitute for fixed pipelines,” he said.
More than a third of the EU’s gas comes from Russia through pipelines, but this year the rate has dropped dramatically. Russia’s Gazprom government has refused to sell more volumes in Europe than those offered by long-term contractors.
Some European politicians and industry analysts have criticized Russia for refusing to force EU leaders to accept a new opposition pipeline. Nord Stream 2.
Gazprom has repeatedly denied this. Over the weekend, the company said allegations of a drop in gas in the EU to cut prices were “false and false”.
Also, in good weather, the demand for gas has also diminished because some of Europe’s most energy-intensive operators are blocking production in factories and refineries due to rising energy prices.
On Wednesday, the US company Alcoa said it would suspend the production of aluminum at the San Ciprian smelter in Spain for two years due to rising electricity prices. For the same reasons, Norsk Hydro on Thursday announced plans to reduce energy in a factory in Slovakia to 60 percent energy.
With Europe’s gas reserves relatively low compared to the climate, traders expect the oil and electricity markets to remain stable for the coming months.
Germany is about to close three of the last six nuclear power stations on Friday as it moves to renewable energy, while France could face power outages when the flu collapses next month as more nuclear weapons halt repairs, using a power grid warned Thursday.
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