Memory 90 percent full
Gas cheaper than before the war began
jwu/AFP
01/02/2023, 7:09 p.m
Mild weather and falling demand depress gas prices. In the morning it fell to pre-war levels for the first time since Russia invaded Ukraine. But experts warn against carelessness: Kremlin chief Putin still has an influence on prices.
Wholesale gas prices in Europe have fallen to their lowest level in almost a year. Gas is currently cheaper than before the start of the Ukraine war at the end of February 2021. According to experts, the reasons are high gas reserves and weakening demand, which is mainly due to favorable weather conditions. The reference futures contract TTF on the energy exchange in the Netherlands was 72.75 euros per megawatt hour for deliveries in February in the morning. That was the lowest level since February 21.
The gas price rose from autumn 2021 and the beginning of the throttling of Russian gas supplies to Europe. From the beginning of the Russian war of aggression against Ukraine on February 24, it then increased in leaps and bounds. On March 7, the TTF reached its previous high of 345 euros per megawatt hour. At the end of August, the price was almost as high, at just over 342 euros.
Russia sold 55 percent less gas to the EU and Switzerland last year, according to the state-owned company Gazprom. However, the Europeans have taken precautions: The storage facilities in Germany, for example, are currently still 90 percent full, while those in France are 84 percent full, according to data from the Gas Infrastructure Europe (GIE) portal and the Federal Network Agency. Europe also benefited from unusually mild autumn weather.
Thierry Bros from the Institute for Political Science in Paris urged caution with a view to the coming months. “Everything depends on Vladimir Putin’s decisions.” The Russian president could turn off the gas tap even further, but he could also supply more gas to some countries – such as Germany or Italy – in the hope of dividing Europe, the expert said.
According to Bros’ calculations, Europe needs at least 30 billion cubic meters of Russian gas to refill its storage facilities for next winter. If this gas is not delivered, “then the prices will probably rise again”.
Nicolas de Warren, chairman of the association of energy-intensive companies in France, warned that this could be the case sooner – namely if there is a cold snap at the end of January. De Warren also noted that demand for liquefied natural gas (LNG) is high around the world and Asia currently pays more than Europe. He promoted “long-term contracts” with exporting countries such as Norway, Qatar, Nigeria and possibly Iraq.