The price of gas in the European market fell below the threshold of 50 euros per megawatt hour this Friday, almost seven times less than at its all-time high in the first days of the Russian invasion of Ukraine. Fears of midwinter shortages, caused by Russia’s crucial role as a supplier to Europe, have subsided.
The Dutch TTF futures contract, which is a benchmark in the European market, fell this Friday during the session to 48.775 euros per megawatt hour (MWh), a first since August 2021. Prices remain historically high: before 2021 and the beginning of the tensions in Russian deliveries, had rarely exceeded 35 euros.
The gas market will continue to be “tense”
The European Bank for Reconstruction and Development (EBRD) has significantly lowered its growth forecasts for the countries it covers, to 2.1% for 2023 compared to 3% previously, highlighting the historically high gas prices, “six times higher than on the other side of the Atlantic”. “Without the drastic reduction in Russian gas deliveries, Europe could currently benefit from above-average growth rather than suffer from economic stagnation,” said Salomon Fiedler, an analyst at Berenberg.
And the reprieve lower prices bring to countries battling runaway inflation may be short-lived.
Europe has increased its LNG imports by 60% in 2022 to make up for falling Russian supplies, according to a report released on Thursday by hydrocarbons giant Shell, which predicts the market will remain “tight” for years to come. due to competition among buyers. and the lack of increase in supply.
3% weekly drop in oil price
On the oil side, the European Brent for March delivery lost 2.97% to $82.67 around 1:55 p.m. GMT (2:55 p.m. in Paris) and the American WTI fell 3.13%. up to $76.03. The price of oil lost 3% during the week, although the trend is less marked than that of gas.
Faced with persistent inflation, the US Federal Reserve (Fed) could continue its rate hikes for longer than expected. But this weighs on the borrowing power of companies and households, which in turn limits consumption and therefore the demand for black gold.
Source: BFM TV
