Friday 29 October 2021
Situation on the market relaxes
Gas prices are falling significantly after Putin’s announcement
Shortly before the start of winter, Germany’s gas storage facilities are significantly emptier than usual. Many experts and politicians suspect the Russian president of deliberately reducing deliveries. A few days ago, however, Putin announced that he would be sending more gas to the EU again. The markets react immediately.
Following instructions from Russian President Vladimir Putin to increase gas deliveries to Europe, the price on the TTF gas market in the Netherlands fell sharply. Between Wednesday evening and Friday, the price fell by around a fifth to below 70 euros per megawatt hour. In the early afternoon the price was exactly 68.53 euros. The price for British natural gas for delivery next month fell similarly within a week, it was 177.00 pence per Therm (29.3 kWh) on Friday afternoon.
Both prices had reached record highs on October 6th: the TTF price was 162.125 euros, the price for British natural gas was 407.82 pence per Therm. Since then they have fallen again, but are still well above the level from early summer.
The main reason for the falling prices since Wednesday evening is Putin’s instruction to the state energy giant Gazprom to increase gas deliveries from November 8, explained Commerzbank analysts Carsten Fritsch and Barbara Lambrech. One third of the natural gas consumed in Europe comes from Russia.
In particular, Putin had instructed Gazprom to fill the gas storage facilities in Germany and Austria. The gas storage facilities in Germany are currently only 70 percent full, as the analysts emphasized. On average in the EU, the storage facilities are 77 percent full. Normally the storage tanks are 90 percent full at this time of year – before the heating season in winter.