On Friday, European natural gas prices plunged 20% in light trading volume. The wholesale price of natural gas delivered by the UK in January next year fell 29.6% to £ 1.45/tham; The wholesale price of natural gas delivered the next day fell 27.4% to £ 1.30/tham.
As one of the hottest commodities this year, European natural gas prices have fallen for eight consecutive days, the longest in seven years. Russia’s natural gas supply from Ukraine to Europe is picking up, and the weather has warmed up. The energy market facing an unprecedented crisis has been urgently alleviated.
Alex froley, LNG analyst at ICIS, a consulting firm, said:
“The mild weather last week and the increase in LNG supply have pushed down natural gas prices, but if there is cold weather in Europe or Asia in the remaining months of winter, prices are still likely to pick up again.”
Kaushal Ramesh, senior analyst at rystad energy, said that the European natural gas supply and demand market was “balanced” because 11 oil tankers were carrying at least 800000 tons of LNG from Asia to Europe.
However, he also warned that the European natural gas market “has not yet come out of trouble”, and the natural gas flow of a key pipeline between Russia and Europe has been reversed for a week and a half. He said:
“The transfer of LNG from Asia is a useful and expedient measure, but it cannot continuously replace a stable pipeline supply.”
More than a third of the EU’s natural gas supply comes from Russian pipeline transportation, but the inflow has decreased this year. Gazprom, a Russian state-owned enterprise, refused to sell additional production beyond the scope of long-term contracts to Europe. Some European politicians and industry experts accused Russia of withholding supplies to force EU leaders to approve the controversial new pipeline Beixi 2.
In this regard, Gazprom has repeatedly rejected the above statement. Over the weekend, the company said that the accusation of low gas supply in the EU in order to manipulate prices was “lies and falsehood”. In addition to mild weather, some of Europe’s largest energy users have restricted the production of factories and smelters due to soaring electricity prices, which has also curbed the demand for natural gas.
On Wednesday, Alcoa, an American industrial group, said that its San Ciprian smelter in Spain would stop producing primary aluminum for two years due to high energy costs. For the same reason, Norsk Hydro announced on Thursday that it plans to reduce the capacity of a factory in Slovakia to about 60%.
Germany is expected to close three of its last six nuclear power plants on Friday, while France may experience a cold snap next month or face a power shortage when a large number of nuclear reactors stop maintenance. The country’s grid operators issued a warning on Thursday.
as the natural gas inventory level in Europe is far lower than the seasonal average, traders expect the natural gas and electricity markets to remain volatile in the coming months.
(Jin x data)
