European gas prices are down more than 20% today. The sharp rise in the prices of this raw material this year has attracted a fleet carrying loads of American LNG. US LNG supplies may help offset the reduced flow of raw materials from Russia. According to data compiled by Bloomberg, at least 10 ships are sailing to Europe. Twenty more ships appear to be on their way across the Atlantic, but they haven’t decided their destination yet.
Gas prices have increased more than sixfold in Europe this year. This is related to emerging economies, where demand is rising, but also due to poor supplies from Russia. Europe’s largest supplier of raw materials has begun to cut it off as pandemic-stricken economies begin to soar.
Infrastructure maintenance and power plant shutdowns also contributed to the rise. Prices are now 13 times higher in Europe than in the United States. In addition, there was a rare bonus for Asia, which made Europe a major destination for LNG.
Another factor behind the lower prices is weather forecasts, which now seem more suitable for Northwest Europe. Next week, temperatures should be above the long-term normal for this period.
The benchmark Dutch futures contract for the next month was down 22% to €135.03 in Amsterdam. The lower gas prices also led to lower electricity prices. The German electricity contract with next year’s supply fell 15 percent to €277 per megawatt-hour, the biggest drop since the beginning of October. The French contract rose to a new record high of 1,000 euros on Tuesday, and fell by 24% to 775 euros per megawatt-hour.
Russian gas supplies to Europe have fallen this week as some buyers buying gas under long-term contracts have already reached their contracted supply ceiling, according to unnamed Bloomberg sources. Quantities sent to Europe via Ukraine today are at their lowest level since early November. In addition, the gas pipeline beauty between Germany and Poland on the third day today. Thus, gas in this main pipeline flows in the opposite direction from Germany to Poland.
This year, in connection with rising gas prices, Moscow was accused of restricting supplies, forcing Germany and the European Union to quickly agree to the Nord Stream 2 pipeline, which will transport natural gas from Russia to Germany along the bottom of the Baltic Sea. However, Russia denies such allegations, and President Vladimir Putin has indicated that Europe has created its own gas problems and must solve them on its own. According to Putin, the group fulfills all its obligations to customers. It must first fulfill its obligations to customers under long-term contracts before it can supply gas to direct markets.
Germany can even resell gas to its neighbors, according to Putin, as evidenced by the reverse operation of the Jamal gas pipeline between Germany and Poland. It is believed that part of the Russian natural gas delivered to Germany ended up in Ukraine. On its border, Russia continues to build up its forces as it prepares for security talks with Washington.
Sources: Bloomberg, ČTK