The spot price of gas in Europe, judging by the charts, once again updates the 5-month record. The price of the September TTF futures on the ICE Futures exchange during the European trading session on Friday reached $3,363 per thousand cubic meters. This contract reached the level of $3,327 on Thursday.
The absolute record for gas prices in Europe was reached on March 7, 2022, when the April futures at some point rose to $3,898.
In July, the cost of natural gas for Europeans was significantly lower than record levels – at the level of $ 1,764 per thousand cubic meters. However, since the beginning of August, the average price tag for natural gas in Europe at TTF has been at $2,356.
It is noteworthy that simultaneously with the increase in the price of natural gas, the euro exchange rate against the US dollar is also declining today, the currencies were able to achieve parity.
The main factor that gas is again approaching record values of cost is that the capabilities of the main suppliers of pipeline gas to Europe are still severely limited in technical terms. Thus, preventive repairs are continuing in Norway, due to which the activity of a number of fields has been stopped, including such large ones as Oseberg, Sleipner, Gullfaks and Gina Krog.
The capacities of the Russian Nord Stream gas pipeline are also still not functioning at full capacity. According to the official version, this is due to the fact that the pipeline has not yet passed the maintenance required according to the schedule and the resulting breakdowns have not yet been eliminated.
Asian buyers are also contributing to the increase in gas prices. Earlier this year, they tried not to force gas purchases on the spot in order to provide free volumes of energy resources to European countries. However, as winter approaches, Asian countries have an urgent need to form their own gas reserves.
Important reasons for the rise in quotes are the ongoing heat and drought in Europe, which reduce the generation of electricity by wind turbines and reduce the transportation of coal by waterway. Thus, the demand for electricity from gas thermal power plants in this region is growing.
Meanwhile, industrial capacities in some EU countries are already suffering a setback due to exorbitantly high fuel prices, so necessary for them to function. In September, production at the largest fertilizer plant in the Baltic States, the Lithuanian Achema, will be completely stopped. Due to too expensive gas, the complex has been operating at only a third of its capacity for almost a year. By the way, Lithuania refused Russian gas in April, as a result of which Achema began to buy fuel from Western countries and receive it by sea.
Ordinary Europeans also suffer. For example, the British Gas and Electricity Markets Authority Ofgem just announced an increase in the limit of consumer electricity and gas bills by 80%. From October 1, the highest amount for most residents of the United Kingdom will increase from £1.97 thousand to £3.55 thousand per year.
According to the forecasts of the consulting company Cornwall Insight, the highest amount of electricity and gas bills will continue to grow: in the first quarter of 2023 to £4.65 thousand, in the second quarter of £5.34 thousand. The decline is forecast only in the third quarter of next year.
Given the almost inevitability of an economic collapse due to the rising price of gas, the leading importers of this energy raw material from the EU countries appealed to the Norwegian government with a request to sell them blue fuel at a price below the market. However, it turned out that Norway is not ready to reduce gas prices for its Western European partners. This was directly stated by the Minister of Oil and Energy of Norway Terje Aasland, and at the same time added that Brussels itself abandoned the practice of long-term contracts in favor of the spot market 20 years ago.
