Russia should have the greatest potential for increasing the supplies, however, despite the fact that gas flows have become stable now, there are no indications that supplies could return to the levels recorded in previous years. Europe is facing several months of winter and potentially frosty weather and there are no clear prospects for any increase in gas supplies. At present, there are no indications that the gas prices could fall and stabilise in the nearest future.This, in turn, will contribute to continued increase in food prices. Due to the currently limited options for fuel switching, this is resulting in demand destruction, which is (and will continue to be) particularly evident in the chemical industry, including the fertiliser sector. In addition, they constitute an increasing burden to individual customers (especially in regions where gas heating is predominant) and to gas-intensive industrial customers. Combined with the related increase in coal-based electricity generation, this also results in an increase in the price of emission allowances. The record high natural gas prices in Europe are contributing to a further increase in the price of electricity – on 15 December 2021 in most EU member states the day-ahead electricity price was more than 300 euros/MWh.Usually, such a low ratio is not recorded earlier than in mid-January. According to data published by the association of European gas infrastructure operators on the AGSI+ platform, on 15 December 2021 these facilities were filled in 61% which is more than 17 percentage points less than the 10-year average for this period. Moreover, at present the level of gas in EU storage facilities is the lowest in at least a decade. Although last month the company started to pump gas to its European storage facilities, from most of them gas is being concurrently withdrawn due to rising demand recorded in the heating season. In addition, there continues to be a high level of uncertainty regarding the volume of Russian gas flows – Gazprom has not booked any capacity in the Yamal pipeline for longer terms (neither annual, nor quarterly and monthly) and in December 2021 it started to book capacities on a daily basis. According to the company’s figures, on 1–15 December 2021 the flows of gas to Europe were more than 20% lower than in the corresponding period in 2020 and more than 33% lower than back in 2019. Finally, despite the fact that Gazprom has increased its supplies to the EU, compared with the average volumes supplied in November, it continues to supply less gas than in previous years. LNG is delivered predominantly to Asia, where prices on gas hubs are usually higher than in Europe (the recent price increases have been exceptional in that they reversed this relationship, which, in turn, may attract additional uncontracted cargos to Europe). The volume of intra-EU gas production has been on the wane and earthquakes recorded in the Netherlands (most recently in November) are preventing even a temporary increase in production at the Groningen gas field. The price increases are associated with falling temperatures, lower renewable energy production, growing demand for natural gas, continued insufficient supply of gas and persistent market uncertainty. the equivalent of more than US$ 1,575 per 1 tcm of gas). On 16 December 2021, the price of gas on the Dutch TTF reached 142.7 euros/MWh (i.e. The prices of natural gas on European gas hubs are once again record high.
0 Comments
Leave a Reply. |