Europe’s benchmark gas costs get on the surge, noting unpredictability regarding enough materials and raised need as Europe is coming close to the 3rd wintertime because Russia attacked Ukraine.
However, the required gas gets seem provided and protected right now.
Dr Yousef Alshammari, President of the London College of Energy Economics informed Euronews Business: “Uncertainty oversupply continues to dominate the markets despite the availability of sufficient gas reserves.’
He added that the EU gas storage capacity stood at 90% in August, way before its deadline and ” today, gas storage space stands at 95% complete, well over 100 bcm [billion cubic metres]”.
However, increased demand for heating and electricity due to lower temperatures has already tested capacities in the first weeks of November.
Recent low temperatures increased gas storage withdrawals in Europe in the first two weeks in November, tapping close to 4% (4.29 bcm) of Europe’s full gas storage capacity, according to data from Gas Infrastructure Europe.
Alshammari expects that storage levels will not be as high by Spring 2025 as they were at the end of the previous winter, in April 2024, when they stood at 60% of capacity. “It appears like this wintertime they can work out listed below 50% which indicates that Europe will certainly require to acquire far more gas this following year to bring back gas storage space at virtually complete degrees. This incorporated with reasonably chillier weather condition is most likely to maintain costs moderately at greater degrees contrasted to their degrees throughout the previous wintertime, which was reasonably milder.”
Geopolitical tensions, driven by the US and Russia are a leading risk factor for energy prices on the continent. “Although I expect that this stress is most likely to de-escalate under president-elect Trump, it appears like the continuing to be days for the existing United States management are making the scenario extra intricate, which will certainly contribute to the power costs volatility worrying both oil and gas,” said Alshammari.
Natural gas prices were at their highest level in one year in the Thursday trade. The uncertainty in Europe grew further as Russia’s Gazprom stopped the flow of natural gas to Austria on 16 November, due to a dispute between the countries.
Meanwhile, a major contract permitting the transit of Russian gas through Ukraine is about to end on 1 January 2025, risking that half of Russia’s remaining pipeline gas exports to the EU would be removed from the energy mix at the peak of demand.
