Although gas prices on the international wholesale market fell sharply in mid-December, the question is how long this will continue. That depends, among other things, on the weather. The colder it gets in the coming weeks, the more gas is needed.
And therein lies the problem: there is little stock in Europe. In order to still have enough gas, extra gas will have to be transported to Europe.
Depends on Russia
That could be Russian gas, but at the moment hardly anything is coming to Europe. And it is doubtful whether that will change in the near future.
The country has not been so generous with the supply of gas in recent months. According to the International Energy Agency (IEA), Russia is even the cause of the energy crisis in Europe.
The country uses the gas tap as a means to put pressure on the EU. By supplying less gas, the price remains high and that affects European consumers. The bank raises its forecast for gas prices in the first quarter of this year from 40 euros per megawatt hour to 50 euros.
Conflict over Eastern Ukraine
And that is without taking into account the conflict between Russia and Ukraine. If this escalates further and the US and EU introduce sanctions against Russia, it is not obvious that the Russian Nord Stream 2 pipeline will be allowed to open, said Josep Borrell, the EU’s representative for foreign affairs, yesterday.
In the video below we update you in less than two minutes about what is going on in the conflict surrounding Ukraine.
And if the two countries really go to war with each other, there is also a good chance that Russia will only moderately open the gas and oil tap to Europe. The country will also pay little attention to earlier agreements on gas supplies, the bank expects. In such a scenario, gas prices could ‘temporarily rise significantly’.
Or liquid gas
There is another option: getting liquefied gas (LNG) from Australia, the United States or Qatar. The only question is whether the stock of LNG that has not yet been sold will be sold to Europe.
There is also a lot of demand for gas in China. If more is offered there for LNG than in Europe, the tankers that are already on their way here will turn around again, the bank expects.
The shortage of gas will be felt all year round. Because it is so difficult to get Russian gas or LNG, stocks will be low at the end of the winter anyway. In order to replenish the reserves for next winter, the demand for gas will remain high, and so will the prices.
The cabinet’s plan to further open the gas tap in Groningen offers no solace. The increase is necessary because gas that had already been counted on cannot be supplied due to setbacks.