Europe’s gas prices are falling in response to signs that continental European countries will be able to survive this winter, as the EU promises to take further steps to tackle the region’s current energy crisis.
Gas is getting cheaper
Amsterdam’s benchmark gas contracts (ICE Entawex Dutch TTF) are down 5.9 percent up to EUR 177.70 per MWh, the brokers inform.
Last week, 15 European Union countries, including Poland, sent a joint letter to the European Commission last week, in which they demanded that a price limit be introduced for wholesale gas transactions in the EU. They were convinced that this measure would be among the EC’s proposals aimed at lowering energy prices. However, this has not happened yet.
Apart from Poland, the letter was signed by: Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Portugal, Romania, Slovakia, Slovenia and Spain.
In the EU, actions aimed at reducing the demand for energy and taking over the excess profits of energy companies are supported.
Countries in the region are forced to act quickly after cuts in gas supplies from Russia to Europe threaten a recession in the region’s economy and fuel inflation.
Tensions on the West-Moscow line have increased recently after the outbreaks of the Nord Stream pipelines, which European politicians have called sabotage.
The Nord Stream links are not working, so it eliminates the possibility of restoring gas supplies in Russia to Europe in the near future and before the winter.
“The good news is that Russia seems to be close to + playing its last card + when it comes to gas for Europe” – write Timera Energy analysts in a market note.
“However, the energy challenges facing Europe will not disappear with the + flowering of the first daffodils in the spring of next year”, they add.
Gas from Russia flows to Europe via Ukraine, but these supplies remain threatened as long as the war in Ukraine continues.
Gas is also supplied via the TurkStream gas pipeline to some smaller countries, including Turkey.
Over the weekend, Gazprom suspended gas supplies to Italy as a result of an open “fight” for legal regulations.
The question remains in the markets whether Europe will be able to replenish its gas storage facilities next year in the absence of fuel supplies from Russia.
Situation may worsen in the winter
Currently, gas storage in the EU is approx. 88%. compared to the 5-year average of 86%, thanks to large imports of LNG, especially from the USA, but the situation may worsen with the advent of colder months.