(Tiper Stock Exchange) – Gas prices are on the rise again in today’s session on the Piazza in Amsterdam, after the declines of recent days. The price of TTF gas futures contracts, used by operators as a benchmark for the European market, settled at 69.4 euros/MWh, up 6.7% compared to the previous closure. It’s about level below the values at the beginning of the war in Ukraine and similar to those recorded between December 2021 and January 2022.
Favoring price moderation in recent weeks, with a drop of around 50% since the beginning of December 2022, are the temperatures above average that the European continent is experiencing, which lead to a lower demand for gas and the maintenance of storage levels.
According to a report by Morgan Stanleyi gas consumption within the European perimeter are down 12% from the seasonal average in December, with residential and commercial demand down 10% in December. The LNG importswrote the analysts, instead they reached instead a new all-time high, with the United States, Qatar and Russia remaining the largest suppliers. In the case of Moscow this may be a contradiction in terms of its interests: if it exports a lot of LNG it favors the drop in gas prices on the Amsterdam market.
Europe has also entered what may be the warmest January on record. However, fuel prices are higher than normal and the continent remains exposed to further supply disruptions. Indeed, gas markets are tense again this year as the LNG supplies will be limitedwith no new major export projects in the near term, and Asian competition could increase.
“There are still many risks around remaining Russian supply and also the potential for increased competition for LNG from Chinasince the country abandons its zero-Covid policy – wrote the analysts of Eng in a report on the topic – Prices will still need to remain elevated to ensure demand destruction keeps the market in balance through winter 2023-24.”