On the Amsterdam gas market, the price of gas rose by more than 9 percent to 124 euros per megawatt hour this morning. The price also rose yesterday, by 10%. The price of gas is still well below the peaks of 350 euros reached at the end of August.
Price fluctuations
The price hike doesn’t immediately lead to problems, says energy expert Hans van Cleef of ABN Amro. “We are well prepared for the winter. Due to the milder weather of the past period, we have not yet had to burn much. The filling level of the European gas depots is now at 95%, which is well above the five annual average”.
Gas prices fell 15% last week, which Van Cleef says shows this is short-term sentiment. “That leads to price fluctuations, but not directly to big problems.”
Unless it’s really cold this winter, he doesn’t expect the export issues surrounding US LNG to play a big part.
LNG storage
Insiders tell the Bloomberg news agency that US liquefied natural gas exporter Freeport LNG in Texas keeps getting a malfunction, started in June. The company has reportedly warned its customers that deliveries scheduled for November and December could be canceled as repairs and regulatory approvals for restarting its factory are still pending.
Freeport accounted for 15% of US LNG supplies prior to the disruption. Now that the LNG supply has dwindled and Europe and Asia want to secure their gas supplies, competition in the market is on the rise. This drives up the price of gas.
Monthly gas contracts are actually showing an increase, Van Cleef says. “But it’s good to look at the annual contracts as well, for the long-term effects. Those prices are up slightly from last week. But the downward trend in those prices from the end of August is still intact.”
As for Van Cleef, the most exciting moment is yet to come. “How much gas will we need this winter and how will we be at the end of March when the heating season is over?”
