excess gas in Europe. It is a temporary living paradox. european energy market. The high supply of European Union countries, a low demand slowdown in the industry due to high prices in recent months and low heating needs of homes due to very summer temperatures at this time of year. The result is very low gas prices compared to recent months and the image of dozens of liquefied natural gas (LNG) vessels waiting to unload around the continent.
“Gas reserves in the main European countries have reached almost 100%,” says Pedro Cantuel, gas and electricity market analyst IGNIS Energía. In the special case of Spain around 93%, according to Agsi data. However, even though the warehouses are full, “ships continue to arrive at the European and Spanish terminals. an oversupply He adds that in the short-term market, which has turned into intense decreases in the daily prices of natural gas, especially in Spain and France, due to the fact that they have a more flexible gas system in terms of supply guarantee and supplier diversity. Thus, while the price of gas in Spain (Mibgas) was 30 euros per megawatt hour this week, the European reference (Dutch TTF) reached 60 euros.
Earlier this week, the operator of the Spanish gas system (Enagás) limited the arrival of methane tankers due to “very high fill levels in the tanks of all regasification plants” and said it is “scheduled to continue until the first week of the year”. November”. This is translated according to figures from the Reuters agency, On 35 boats plying the coast of Spain before reaching the port. According to Antonio Canseco, responsible for the Axpo Iberia gas field, the daily cost of ‘hiring’ these vessels is $400,000.
This is oversupply. low industrial demand This is mainly in European countries due to the high prices of natural gas throughout the year. To get an idea, the average indicated by this raw material went from 20 euros per megawatt hour to 200 euros with the war due to the drastic decline in Europe’s gas imports from Russia. But at the same time high temperatures this time not only in Spain, where it is more common, but also in the rest of the continent, which is preventing warming from starting.
According to professor José María Yusta of the University of Zaragoza, Russia’s “exhaustion of the gas cut strategy in the market” is also affecting low prices. Since June 2021, Moscow has used the pressure on the gas tap to raise the prices of this raw material, using energy “as a weapon”. “But after the cuts Nord Stream Adding that the European Commission’s announcement of an intervention in the benchmark index (Dutch TTF) has caused “many speculators to leave the market”, Yusta explains, “There are very few announcements left now.”
a mirage
As a result, experts agree that this will not be a long-term situation, and most Price:%s high will return. “This can only lead to confusion that the situation is better than it is, but it is a situational issue,” Canseco explains. The prices of the futures markets (buying gas for delivery in a few months) offer some clues. Thus, although the daily price is 30-40 euros per megawatt hour, December purchases are already paid over 100 euros per megawatt hour. “Current prices are very low because gas cannot be stored and it is better to sell but there is no such pressure for December because there is assuming healthy demand and prices are higher because there is not much production,” he adds.
The key will be “stability of supply”. NorwayTemperatures, the rate at which reserves are draining and the capacity to continue towing LNG vessels in Europe, according to Cantuel. The four variables should be in balance, but Canseco adds one more: how is Asia reacting to the current price situation. “If they think current prices are adequate, they will start demanding this gas, which will divert ships to Asia, putting pressure on supply and therefore on price,” Canseco adds.
The main fear of the industry, a long winterAccording to José María Yusta, gas tanks supply 25% of the continent’s annual demand, resulting in less preparation for next winter. “It is unlikely that there will be serious (supply) problems this winter, the problem will be when a new race starts that will keep prices tense for the rest of the year,” Yusta said.
It should be noted that Europe’s storage facilities are full today, because since March, when the war began, it has launched its strategy to get the underground storage infrastructure to 80% by 1 October and 90% by 1 November. In addition, this winter the continent still received ‘help’ from Russian supplies via the gas pipeline, which is not expected to be operational again in the coming months.