HomeMediaLatest NewsSpot gas price in Europe retains potential for decline, but gravitates towards growth

Spot gas price in Europe retains potential for decline, but gravitates towards growth

26 May 2023

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

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the InfoTEK magazine on the reasons for the decline in exchange prices for gas in Europe and their prospective dynamics in 2023.

Spot gas prices in Europe have been declining since the end of last year and on May 25, for the first time in two years, they fell below $300 per thousand cubic meters - 13 times less than the record values of the first days of last spring.

Belogoryev noted, that the price of gas in futures contracts is now higher than the spot, which indicates that the market expects the price to rise.

“In the future, we will see a seasonal increase, but the size of the amplitude is still debatable. If the overall balance remains as favorable for Europe, then prices will probably not rise above $500-600 by December-January. But this is not necessary, since the situation is still remains unstable. The balance is fragile due to demand, which has already begun to respond to price cuts, but is doing so slowly," the expert said.

Belogoryev noted that the pressure on prices is due to the fact that many players have hedged volumes, and now it is not profitable for them to buy gas at current prices.
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