2023-05-19 19:15:17
Energy prices return to a apparent normality. One year after the start of the war in Ukraine and after reaching historical levels the last summer, gas, electricity and fuel They go back to their previous prices. From the end of 2022, the price of the Petroleum internationally (Brent barrel), it has gone from 85 dollars to about 75, although more abrupt has been the drop in natural gas, which has gone from 140 euros per megawatt-hour (MWh) to below 30 euros . Far in both cases from the records of 130 dollars and more than 300 euros, respectively, which they reached last year. In the case of the Spanish market, the price of gas stands at 25 euros.
“We have had a milder winter in relation to the last years and the reaction of European countries to the war in Ukraine, with demand drops have led to the inventories in underground storages are very elevated for the dates of the year in which we are ”, explains the president of the employers’ association Sedigas, Joan Batalla. “With all prudence, we are in a much better situation than in the previous year. In July of last year there was a real risk of supply cuts. In the current situation no spikes will occur like the year before. In the futures market, the price in the third quarter stands at around 30 euros per MWh“, Add.
One of the sectors most affected by the extremely high gas prices last year was the intensive industrywhich was forced to stop many of its factories after the start of the conflict in Ukraine. In December 2022 and in January 2023, the industrial gas consumption fell by 40% compared to a normal year (2019 or 2021). This drop in consumption is solely due, according to the sector’s employers’ association, to demand destruction which has not yet recovered. In April the reduction has smoothing up to 20%compared to the ‘usual’, the same decrease as during the pandemic.
“We live a tense calm. In December no one would say that we would have prices below 30 or 25 euros per MWh because in September they were at 250. The strategies (gas purchase) are annual and who did not risk it is likely that you are not enjoying this price drop”, explains the president of the employers’ association GasIndustrial, Veronica Rivierewhich adds that “there is still a lot of uncertainty to see how Asia recovers, how cold it will be next winter and if the drought continues. Also the nuclear ones in France and if more electricity is generated. There is many economic variables that can affect the behavior of the industry”.
The electricity generation is, precisely, another of the beneficiaries of the drop in the price of gas due to its contagious effect on the formation of the price of light. So much so that since mid-February the Iberian exception has not had to work. Electricity in the wholesale market stood in the last month at a average of 71 euros per MWh. The operations manager Enerjoin, Carlos Martin Graña, puts the focus on the decrease in consumption. “We are in a Perfect storm because sellers have excess capacity to sell, both in the case of gas and electricity generation, thanks to renewables, and there are few buyers due to the drop in demand, and that is why prices are sinking,” he explains. “How long can this last? There are two variables. One is what the rest of the world is going to do, especially China, and what consumption is going to do. Current electricity prices with normal demand would be 90 euros per MWh”, he adds.
According to the expert in the energy market and electricity bill from the Universidad Pontificia de Comillas, Jose Luis Sancha, the regulated invoice of the electricity -in the free market prices will begin to fall if the situation remains stable as soon as the contracts expire– stands at around 40 euros per MWh per month for a consumer of 200 kilowatt-hours (kWh) per month and 4 kW of installed power so far this year. “the worst is over. Was August of last year and it is already very far. The problem could come in winter because there will be very little photovoltaic and the demand will rise, but we always have the safeguarding of the gas price ceiling which is extended until December. Hopefully we don’t have to resort there, but we have that protection”, adds Sancha.
The decision of the cartel of producing countries to reduce the supply of crude oil by more than one and a half million barrels per day at the beginning of April shot up the price of brent barrel, a reference for Europe, 8% in its first session to 86.44 dollars per barrel, but a month and a half later the price has fallen by 10 euros. And with it the fuels, despite the fact that the reflection of the decrease in the price is usually slower than the increases. So this Thursday the Gasoline had an average price of 1,567 euros and the diesel, 1,407 euros. On Thursday, February 17, 2022, before the start of the war, the prices were 1,583 and 1,474 euros, respectively. “The market is trying to balance supply and demand. It does not seem that the cuts in production have put pressure on the supply so that prices rise in the face of uncertainties regarding economic growth,” says the spokesperson for the Spanish Association of Petroleum Product Operators (AOP), Ines Cardinal.
#World #economic #situation #Energy #prices #return #Ukraines #prewar #levels