An Atlantic Age: will American gas warm Europe?

Marcel Salikhov, president of the Institute for Energy and Finance, commented to Izvestia, when to expect a fall in energy prices.

Marcel Salikhov noted in a conversation with Izvestia, that in mid-December, spot prices for TTF exceeded spot prices for gas in Asia. This stimulated suppliers to redirect uncontracted gas flows to the European market.

Salikhov admits the possibility of further price reductions on one condition: if there is a warm winter and LNG inflows continue.

- This, however, is unlikely. Futures markets expect relatively high prices (above $800 per thousand cubic meters) to continue throughout 2022. Back in early December, markets expected prices to drop to $500-600 per thousand cubic meters by the summer of 2022. However, in December, market expectations changed quite seriously, and now a significant price reduction is expected only in 2023.

The situation around the timing of the commissioning of Nord Stream 2 also remains uncertain, which increases market tension and contributes to a higher price level, the economist stressed. According to him, the new German government is ready to resist putting the gas pipeline into operation to a greater extent. This will not stop the certification of NS-2, but may slow it down on formal grounds.