Gas prices in Europe to remain high over next 6 months

Oil&Gas Materials 16 October 2021 09:45 (UTC +04:00)
Gas prices in Europe to remain high over next 6 months

BAKU, Azerbaijan, Oct.16

By Leman Zeynalova – Trend:

Gas prices in Europe are expected to remain high over the next 6 months, Trend reports with reference to Capital Economics, a UK-based research and consulting company.

“European natural gas prices rose sharply as demand remained high and stocks remained well below normal seasonal levels. Moreover, European governments are increasingly acting to relieve energy costs for consumers, which could actually weaken the standard demand rationing effect of higher prices. Looking ahead, we expect prices to remain high over the next six months before falling next year as supply picks up and demand growth normalizes,” reads the report released by Capital Economics.

The price of coal also climbed, in part because it is becoming more and more cost competitive relative to natural gas for use in power generation, according to the company. “What’s more, cold weather in China and recent flooding in Shanxi, a major coal producing region, also boosted prices. Meanwhile, oil prices were also up, despite US stocks climbing last week for the third week running. We expect both coal and oil prices to remain high over the coming months before cooling later next year as supply catches up with demand.”

This week the prices of energy commodities were the pick of the bunch.

‘Brent crude rallied throughout the week and briefly breached $85 per barrel on Friday. OPEC’s monthly oil market report showed that output in September was still 390,000 barrels per day short of target. As prices rise, there are growing calls for higher OPEC production. But it seems doubtful that the group could raise output much faster, unless it abandons the current quota system. Meanwhile, a cold spell that has blown through China has compounded upward pressure on energy prices. That is in addition to the Chinese government allowing coal-fired power prices to rise by up to 20 percent from base levels from Friday.”


Follow the author on Twitter: @Lyaman_Zeyn