The gas market is feeling more moderate. The focus this week is more on the developments in the European market and less on the geopolitical game. Will the price drop to the lower end of the level that we should expect in the coming months?
The price for gas has fallen in recent days. On Thursday, January 6, the TTF quote peaked at €96,50 per MWh, which is now €75,75 per MWh. Last year in this period the price for gas was €20 per MWh. But compared to December - when the market hit €180 per MWh - the market is entering calmer waters. The milder weather and the decision by the Dutch government to pump up more gas from Groningen will ensure that the market will calm down again, at least for the short term.
In addition, various preliminary usage figures for the fourth quarter of last year show that industrial users consumed approximately 5% less. The high price in December has caused temporary production stops.
Stock remains small
The underlying cause of high gas prices in the European Union remains unchanged, experts warn. The stock fill rate is still well below the five-year average and replenishment is not possible. However, the rate of withdrawal is slowing down. One of the problems the market is currently facing is the fact that it is more economically interesting (when possible) to use relatively cheap gas from storage instead of importing expensive gas from Russia.
There is a risk that, if there is another cold period at the end of winter and demand increases, the price could make strange jumps. For next summer, the low filling level means that a lot of extra gas will have to be imported in order not to have the same problem again next year. This effect can be seen in the futures market. Contracts for this year are all above €70 per MWh. Only in April 2023 will the price really drop to €41 per MWh.