Winter is coming, gas prices continue to rise in Europe
2022.11.21 11:53
Winter is coming, gas prices continue to rise in Europe
Budrigannews.com – On Monday, a cold snap across the continent put the continent’s ability to maintain low demand in the winter without assistance from Russia, its usual primary supplier, to the test. Benchmark gas prices rose as a result.
The benchmark front-month contract for all of northwest Europe was up 2.6% at €115.51 a megawatt-hour as of 11:15 ET (16:15 GMT).
As temperatures have started to fall following a warmer-than-usual start to the peak winter heating season, TTF prices have found something of a bottom in recent days.Due to the mild October, buyers could inject spare gas into storage for longer than would normally be the case.As a result, according to data from Gas Infrastructure Europe, Europe’s storage facilities were over 95% full over the weekend.
Despite efforts by the European Commission to limit reference prices in an effort to reduce the continent’s overall fuel bill over the coming winter, trading in the TTF has continued to be active.A fixed price ceiling and some preliminary information regarding what would trigger a cap are included in the most recent proposals from the Commission.
“With potential unintended consequences for supply security or demand-reduction measures,” assert Rystard Energy analysts, “any move to limit TTF prices will distort market signals.”They also say that if trades that are currently conducted on Europe’s exchanges move to the over-the-counter market, it may be impossible to enforce.
The prolonged fire-induced closure of the Freeport LNG facility on the Texas coast this summer is one factor that continues to support prices.Last week, Freeport moved its anticipated restart date to the middle of December.When it is operational, Freeport LNG will account for nearly 4% of the global market for liquefied natural gas.
Somewhere else Monday, there was a sign of the opposition that the EU will look in the worldwide market to supplant Russian pipeline gas completely with LNG for any lengthy period.Qatar, a gas-rich emirate, agreed to supply China’s Sinopec (OTC:) for a long time.with gas from its most recent North Field expansion in the Persian Gulf.It is Qatar’s largest supply agreement to date, with a yearly volume of 4 million tons and a duration of 27 years.
QatarEnergy chief Saad al-Kaabi said, as reported by Reuters, “Today is an important milestone for the first sales and purchase agreement (SPA) for the North Field East project” shortly before the signing of the agreement.”It indicates that long-term deals are taking place and are crucial for both sellers and buyers,”
