Did someone say energy crisis in Europe? A strange thing happened in the Netherlands this morning: the price of gas dropped by more than 12% to below 100 euros per megawatt hour for the first time since June. In the meantime, the drop moderated slightly to 102 euros for a megawatt hour – still about 10% less than Friday.
Compared to the peak in August, the price of gas dropped by no less than 70%. The sharp increase in liquefied natural gas (LNG) imports in recent months has resulted in inventories being higher than normal levels. It is also relatively warm weather for the time of year, with a forecast that will remain comfortable until the end of October.
For several months now, Europe has been in a state of near-panic ahead of winter with fears of a lack of energy to heat homes. The concerns led some countries to limit the use of electricity and gas in order to avoid shortages. The crisis comes against the background of the European boycott against the main energy supplier Russia as a protest against its invasion of Ukraine.
The improved conditions in the gas market ease the pressure on the European economy. However, prices are still more than three times higher than the five-year average for this time of year. Also, a period of very cold winter weather can quickly deplete inventory.
“Europe is now in a comfortable position in terms of gas supply,” said analyst Graham Friedman. According to him, the risks of power outages, with the temporary closure of the electricity supply and the gas allowance have decreased. “But the real test will come when we get really cold winter weather,” he warned.
At the European summit held last week in Brussels, the leaders of the 27 EU countries once again discussed a common policy to deal with the energy crisis. The EU countries agreed that the price of the gas that the EU imports will be limited in principle and at the same time agreed to a joint purchase of gas.
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