The price of European gas fell to its lowest level in three months. Europe’s leading TTF stock exchange closed yesterday at €161.95 per MWh. This has fallen by more than half since its peak at the end of August.
Good news from TTF, the Dutch wholesale gas-traded exchange that sets the standard for the price of European gas. Because the stock market closed yesterday at 161.95 euros per MWh, the lowest point in more than three months. Since July 1, the closing price for European gas has fallen below €160/MWh. Moreover, it is more than half the price since the huge and historic peak at the end of August, when the exchange closed on August 26 at 350€/MWh.
The drop in the price of European gas comes despite the suspected sabotage of the Nord Stream 1 and 2 gas pipelines between Russia and Germany. If shipments of liquefied gas (LNG) to Europe continue and current energy supply to industries and homes continues, the market assumes that even in cold temperatures, Europe will pass the winter without a major gas shortage, according to analysts. It should also be noted that the market is assuming a downtrend due to the impending recession in Europe. In addition, European gas supplies are filling better – and earlier – than they have been in recent years.
It remains to be seen if the decline will continue today. At around 10am this morning, the TTF exchange traded below 155€/MWh, but in the meantime, the price rose again above the level at which trading closed yesterday. Moreover, despite the decline in recent weeks, the price of gas is still at a historically high level. For example, the level at which the price of gas stands today is still about 245% higher than it was exactly a year ago, when about 47 euros / megawatt-hour was paid on the wholesale exchange. It seems that “we must not forget that we come from an absurdly high standard”.
And the impact of this price drop on our energy bill remains evident. Wholesale prices only translate to special contracts with some delay. Only when this price level lasts for the rest of the month will we really notice it on the next month’s consumer contract price tags.
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