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Gas cuts rates

24 October 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented on the dynamics of gas prices in Europe to Kommersant FM radio station.

Gas prices in Europe have been falling rapidly for the second week in a row. On October 24, the cost of fuel on the London Stock Exchange fell by 14% - below $1,000 per 1,000 cubic meters. The last time prices fell to such values ​​on 14 June. At the same time, at the end of August, quotes passed the psychological mark of $3.5 thousand per 1 thousand cubic meters. However, since then, the cost of gas has been slowly going down.

Alexey Belogoryev explains this by the warm weather in the European Union. However, he does not rule out that in the midst of winter, the price dynamics will change:

“During the autumn-winter period, and we have already entered it, prices are highly dependent on market factors - primarily on weather conditions, the state of stocks and supply.

Now the temperature in the second half of October is much higher than usual. And there are much more reserves in European storage facilities than in previous years. There is a chance of bringing them to the level of 95% by the beginning of November. At the same time, the current gas supply is still stable, that is, there are no serious interruptions in the supply of either Norwegian fuel, or Algerian, or LNG.

In addition, of course, the discussed regulatory measures by the European Commission also affect the market, although they have not been adopted, but are indicated and clearly indicate that the upper price ceiling for TTF is applied in one form or another. Of course, this scares away all the players who traded gas derivatives in pursuit of financial gains. At the same time, a favorable current balance of supply and demand is maintained, plus a high level of stocks.”

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