Natural Gas Prices: increase in Europe, how long will it last?
European natural gas futures rose to 36 euros per megawatt hour in mid-December, and this is due to a combination of causes that we will examine later. Here is the actual graph:
The causes of this increase, which could stop or continue over time, can be summarized as follows:
- BP and other companies have preferred not to make the Red Sea passage for their GNO tankers; , but do take the longer and more expensive Cape of Good Hope route. This will delay LNG deliveries from Australia and the Gulf to Europe and make them more expensive. Even those from the US to Asia have problems due to congestion in Panama;
- Furthermore, the cold wave in China will lead to an increase in consumption in the East, and this will presumably increase prices worldwide;
- furthermore, expectations for a cold wave in the USA in 15 days increases expectations of a higher forward price.
This increase is counterbalancing, for now, the expectations of a decline in consumption due to the less than positive economic news from China and Europe. It now remains to be seen whether the announced security operation in the Red Sea, both US and Chinese, will be able to resolve the transit problems in Suez, and therefore lead to a new drop in prices.
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The article Natural Gas Prices: increase in Europe, how long will it last? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/prezzi-gas-naturale-aumento-in-europa-per-quanto-durera/ on Mon, 18 Dec 2023 15:32:17 +0000.