Since the energy crisis, gas prices have fluctuated more than before.
(Photo: IMAGO/Wolfgang Maria Weber)
Frankfurt, Dusseldorf In the past week, the gas price has increased by around 30 percent within a few days. While gas price surges became almost a habit during the energy crisis, they have become less frequent since the spring.
One megawatt hour (MWh) of gas for the following month cost EUR 31 on the Dutch TTF exchange last Monday (June 12). On Friday (June 16) it was 41 euros. The gas price has even doubled since the beginning of June.
At the beginning of the week, the price fell back a bit. Nevertheless, the movement was reason for various gas market analysts to take a closer look at the surprising change. Gas expert Andreas Schröder from market research company Icis says: “Norwegian gas processing plant Nyhamna is currently out of service.”
The plant will not be able to work longer than originally expected. As a result, around two billion cubic meters of natural gas would be lost in Europe. That is about two percent of Norway’s annual production.
The energy analyst Nayoung Kim from the major Swiss bank UBS made a similar statement. She writes that pipeline gas exports from Norway fell by eleven percent compared to the previous month. She also attributes this to maintenance work on the Troll production platform and the Karstö processing plant.
Gas prices: The reason for the increase could be the end of gas production in Groningen
At the same time, imports of liquefied natural gas (LNG) to Europe fell by five percent compared to the previous month. However, this is probably less due to the fact that insufficient quantities are available on the market and more to the fact that gas demand in Europe is currently comparatively low due to the warm weather and economic problems.
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However, there could be another reason why gas prices have risen so quickly recently: Production in the Dutch gas field near Groningen is likely to be discontinued soon, as Commerzbank analyst Barbara Lambrecht writes, citing insiders. Groningen is the largest gas field in Europe, but has not been producing as much as it could for a number of years due to problems with earthquakes in the region.
According to Lambrecht, maximum production was reduced to 2.8 billion cubic meters in the twelve months to October, which corresponds to around half a percent of European gas requirements.
Gas from Russia is still missing
The closure of the gas field in Groningen was actually planned for the coming year. Now it will probably be brought forward to October. Lambrecht assumes that the violent price reaction on the market can be explained above all with a high level of nervousness.
There is still a lack of Russian gas on the world market, which has provided Europe in particular with cheap energy for a long time. Currently, the existing quantities of liquid gas are sufficient for the supply. Nevertheless, trading in these quantities is more volatile and less predictable than it used to be. The stock exchange prices are less stable.
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First publication: 06/19/2023, 6:54 p.m.