Gasoline prices in Europe fell on Monday, touching their lowest price since June, as Europe reported almost full inventories to weather the winter, when oil suffered from fears of a recession. Around 12:30 p.m., the Dutch TTF futures contract, the benchmark for natural gas in Europe, moved to 98.60 euros per megawatt hour (MWh), falling below 100 euros per MWh, for the first time since June.
“Prices are down significantly from what we saw in August and September, thanks to mild autumn weather across Europe and high storage levels ahead of the onset of winter,” commented analysts at Energi Danmark. PVM Energy estimates that the European Union’s natural gas reserves are 92% full. At the end of August, the TTF had climbed to 342,005 euros per MWh, less than 3 euros from its historical maximum reached in March a few days after the beginning of the Russian invasion of Ukraine.
However, natural gas prices in Europe are still moving at high levels, 40% more than at the beginning of the year. For Stephen Brennock, of PVM Energy, “the abundance of supply (…) and the fall in gas prices have reduced the prospects of substituting gas for oil”, particularly for heating, for the coming months, thus freeing pressure on crude oil prices.
oil down
A barrel of North Sea Brent for delivery in December fell 0.71% to $92.84, and its US counterpart, a barrel of American West Texas Intermediate (WTI) for delivery in the same month fell 1, 02% to $84.18. Although the two raw materials are only marginally substitutable, gas prices, recently pushed to stratospheric levels, have encouraged the search for substitutes such as diesel, which turns out to be a good alternative for heating or even electricity production. Therefore, depressed gas prices had increased the demand for crude oil.
In addition, “the rise in the dollar and the uncertainty of world demand continue to put pressure on the prices of raw materials,” adds Walid Koudmani, an analyst at XTB. As crude is traded in dollars, a sharp appreciation of the greenback weighs on black gold as it weakens the purchasing power of investors using other currencies.
Source: BFM TV
