The gas price is falling quite fast at the moment and appears to be a lot less volatile than in previous weeks. Extensive maintenance of various Norwegian gas fields in particular appears to be pushing down the price of gas. In addition, the filling of European gas reserves is still ahead of schedule.
The gas price mainly moved downwards this week. On July 5, the gas price was at the highest point of the week, at €34,37. After that, gas prices fell in fits and starts. On Tuesday, July 11, gas was below €30 for the first time since early June. The TTF traded at €29,05 that day.
The gas price appears to be falling mainly due to energetic developments surrounding the maintenance of Norwegian gas fields. Since June, all kinds of maintenance has been taking place at various Norwegian gas fields. Much of the work was planned, but unfortunately a number of spontaneous disruptions also occurred. In addition, a lot of maintenance appears to take longer than planned.
For the first time in over a month, there was finally good news this week. At the height of the disruptions, supplies from the Scandinavian country were 25% lower and as much as 150 cubic meters less Norwegian gas was exported to Europe. Last week, another 30 cubic meters became available and this week the supply will increase again by 30 cubic meters. According to the Norwegian grid operator Gassco, the first round of work appears to be in sight. Analysts therefore expect prices to be a lot less volatile in July. If the first week is any indication, this prediction appears to be coming true. The TTF had a clear downward direction and upward outliers remained limited. However, maintenance is not yet completely over. A new maintenance round will start in the coming weeks.
Reserves well stocked
In addition, the filling of gas supplies is still going smoothly. According to figures from the Dutch Gas Union on July 10, the gas reserves are 81% full. This means that the Netherlands is well ahead of schedule. The targets for this time of year are 68%. The expectation is that the filling will continue to progress favorably for the time being. The weather is quite good. According to the latest expectations, it will remain a few degrees warmer than average this month. Analysts expect the production of solar power to increase by 20%, which will require considerably less gas to produce electricity.
In the meantime, Europe still appears to be in a good position to purchase LNG on the world market. The number of LNG ships heading to Europe is approximately the same as last year, despite greater demand from China.
At first glance, the filling of reserves in Germany also appears to be progressing favorably. Yet there is not all good news. The filling per day is becoming less and less stable. Currently, the rate at which gas reserves are replenished is increasing by approximately between 0,1 and 0,3 percentage points per day.