Finance

Gas price sky-high again: ‘It only seems possible to go up’

At the moment, the price for a megawatt hour (MWh) of gas on the Dutch futures market fluctuates around 175 euros. By way of comparison: when the year started, it was still 17 euros.

The current gas price is therefore at a record high and is also a lot higher than the first peak at the beginning of October.

Jamal Pipeline

Van Cleef points to the Russian natural gas supply via the Jamal pipeline, which runs via Poland and Belarus to Germany and the Netherlands. “This pipeline has almost come to a standstill for a few days now, adding further turmoil to an already fragile market, pushing gas prices up even further.”

Why the Jamal pipeline is shut down is not entirely clear. According to the energy expert of ABN Amro, it may be because the Russians’ own use is increasing due to the cold weather. “But it also appears that they are already filling the controversial Nord Stream 2 pipeline with gas from the Jamal pipeline.”

Depends on Russia

Europe is heavily dependent on Russia when it comes to gas, which is therefore a political means of pressure. Europe cannot switch to another supplier, such as the consumer, given the enormous quantities. While the tensions surrounding Ukraine also have an influence.

Van Cleef: “Russia adheres neatly to the contracts it has concluded with Europe, only Europe itself has concluded fewer and fewer contracts with them. So we simply have to buy more gas on the free market, where not much gas is available. of that generally goes to China, because they are the highest bidder.”

Is there hope?

Although it is already cold outside today, the real winter has yet to start in the Netherlands. Is there still hope that gas will become cheaper? “That depends on the one hand on how severe our winter gets, and on the other it depends on Russian President Putin: is he willing to export more gas this way or will he stick to the existing contracts and keep it what it is?”

He expects it to be exciting in the coming months. “Certainly from February. Then the gas stocks usually reach a very low point. The gas price only seems to be able to go up at the moment.”

Electricity price also peaks

Western European wholesale prices for electricity (which suppliers pay for products) have also risen recently because four French nuclear power plants are shut down for maintenance, which means that France need to import more power. In addition, Germany has announced that it will shut down half of its reactors this year. Higher gas prices also contribute to higher electricity prices.

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