European gas prices have remained stable over the past week at a relatively low level for this year. The average price on the futures market TTF has only been within a bandwidth of around €7 per MWh for the past 7 days. Although short-term gas shortages on the European market are no longer in the picture, Russia is still laying a floor in the market.
The average price on the Dutch TTF futures market for Natural Gas was €9 per MWh on Wednesday, February 75,80. That is the lowest point in three weeks (January 20). In that respect, it was a relatively quiet week on the gas market, as the peak was on February 4 with a price of €82,65 per MWh. This is partly due to the fact that the supply of Russian gas to Europe continues, despite the tense atmosphere surrounding the conflict in Ukraine. Thereby the wind in Europe has made a significant contribution to energy production in recent days, which also had a relaxing effect on the gas market.
The supply of liquefied gas LNG from the American continent is also continuing smoothly. Even so smoothly that the freight rates for the transport of LNG have been drastically reduced, Bloomberg reports, because shipping companies are eager to get involved in this continuous logistics of gas to the European continent. Add to this the mild temperatures for the time of year and the expectations that a real winter will not materialize in the short term and the ingredients for pressure on gas prices are clear.
Short-term gas availability no problem
Nevertheless, the gas price still refuses to fall firmly through the current floor of €75 per MWh. According to analysts, this has everything to do with the uncertainty that Russia brings with it in the conflict over Ukraine. The threat that Russia may turn off the gas tap at some point continues to hang over the market. Yet as time goes on, this argument becomes more emotion-driven than that Europe will have a fundamental problem in the gas supply. The mild weather and the continuous supply of LNG ensure that there is no problem in the availability of gas in the short term.
In addition, Japan indicated last week that it would send ships with LNG to Europe in the unlikely event of a shortage due to closed Russian gas taps. Japan itself has more than enough gas in stock and can spare part of the surplus. This does not alter the fact that the current gas market is still monitoring the actions of Russian President Vladimir Putin and the Russian bottom in the market is therefore holding up.