ANPGas consumption
Although energy prices are rising less rapidly than expected, some energy suppliers are even announcing price reductions and Europe’s gas reserves are well filled, the energy crisis is not yet over. Because the market is tight and so prices will fluctuate, energy suppliers warn.
The gas price market is mainly about expectations. The price is now 2.5 times higher than before the crisis, which broke out due to the war in Ukraine. “While everything is going well now: a mild winter, sufficient gas supplies and a slower growing economy in China,” says Hans van Cleef, energy economist at the Public Affairs Consultancy.
Last week, for example, gas prices in the Netherlands rose sharply due to a threatening strike at two major Australian energy companies. “Liquefied gas from Australia goes to Asia, not even to the Netherlands, but prices still rose by 40 percent in one day,” says Van Cleef.
Sentiment
The price went up because if there is less supply from Australia due to the strike, customers will have to find gas elsewhere. That also drives up prices in Europe. But now that the strikes are probably over, gas prices are falling sharply again. Although it is also important how the Chinese economy recovers. With economic growth, the demand for gas also grows.
The sentiment of the market determines how prices will develop, says Van Cleef. “The market is tight, the supply of liquefied gas (LNG) is hardly growing. The market is sensitive, so prices fluctuate strongly. People say the energy crisis is over. But it will last for a while, at least 2 years. 3 years,” he expects.
LNG is gas that has been cooled to -162 degrees Celsius, making it liquid and can be transported across the ocean in large tankers. After arrival it is converted to ‘normal’ natural gas. That gas is more expensive.
Due to the war in the Ukraine, gas and electricity prices shot up last year. After that, gas consumers started to behave differently. Not only companies have used less gas, households have also used gas more sparingly. They consumed 13 percent less gas than in the first half of 2022, the Central Bureau of Statistics (CBS) reported yesterday.
Most of Europe’s gas now comes from the US and Qatar, which have replaced Russia as a gas supplier. The Netherlands quickly arranged the import capacity for this. “We already had LNG import and storage in Rotterdam and last year a new import terminal was built in Eemshaven in six months. Now additional storage is being built in the Rotterdam port, which will further increase capacity,” says Rene Peters, Director Gas Technology TNO.
Incidentally, producing liquefied natural gas is difficult, says Peters. “It takes a lot of energy and building new installations takes time, at least two years. That also means that the market is still unstable.”
Security
Another difference with last year is that consumers can now take out permanent contracts again. In many cases, those rates are below the price ceiling. As a result, people are at little risk. Is concluding a permanent contract now wise?
“Gas prices are still falling,” says Peters. “In winter the price is a bit higher, but you can still see that prices are still falling. So if you can handle the risk, a variable contract is a good option. At the same time, dynamic contracts have a less dampening effect and then you can suddenly have to pay a lot more when prices rise, for example during a severe winter.”
The price cap will disappear at the end of this year and no clear new agreements have yet been made. Van Cleef can also imagine that people crave security. “It looks favorable now, but that is certainly no guarantee for the future. I think that prices are more likely to rise again than fall, but that is of course speculation.”
Rust
At comparison sites such as Independer and GasLicht.com, this period is the most frequently asked question: to secure or not? “Our advice is to fix it. Especially since the price ceiling is ending. Then the price you have to pay to the supplier will be higher at the beginning of next year. The price will also rise because normally more gas is used in the winter,” says Joris Kerkhof , energy expert of Independer.
Ben Woldring of energy comparator Gaslicht.com says that prices might as well go down fast. “In the past twenty years, there have only been a few moments when securing it would have been more favorable. When prices fall, you are stuck with such a contract. At the same time, a permanent contract also gives peace of mind.”
The government may also play a role: if the energy tax is reduced, costs will fall. Woldring: “You also benefit from that if you fix your price. Because you actually fix everything with a permanent contract, except for taxes. If they go down, you obviously pay less.”
2023-08-25 18:11:13
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