Gas prices in Europe may briefly fall below zero in the summer — Bloomberg
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European short-term prices for natural gas in Europe may briefly fall below zero. This is reported by Bloomberg.
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What is happening with prices
The price of gas in the EU is falling for the eighth week in a row.
A situation where gas producers actually pay consumers to take gas away from them is becoming more and more likely, as gas prices have already approached pre-crisis levels.
“This has not happened since October 2006, when intraday prices in Great Britain briefly fell below zero after the opening of a new gas pipeline under favorable weather conditions,” the message says.
Read: Gas prices in Europe fell below $300 for the first time in two years
Similar conditions are forming now: storage facilities are filling up, consumption is faltering, and renewable energy sources are gaining momentum. Bloomberg notes that zero prices are more likely in countries with small underground storage, such as Great Britain.
On some regional gas markets in Europe, prices can become negative during hours or days with a high level of renewable energy generation, said Peder Berland, vice president for gas trading and optimization of the Norwegian oil company Equinor. However, he warned that negative prices are still far away and “a lot can happen on this path.”
The reason for the drop in prices
European gas prices are falling as a weak regional economy threatens the outlook for demand.
Let’s remind
The price of June futures at the TTF hub in the Netherlands decreased by 5.3%, dropping to a minimum of €26.3 per 1 MWh, or $296.42 per 1 thousand. cube. m, taking into account the current exchange rate on the Forex market, as evidenced by the data of the ICE exchange. Below $300 for 1 thousand. cube. m gas price fell two years ago — on May 20, 2021.
Source: Ministry of Finance
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