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Europe has enough gas stored to survive this winter - Rystad Energy

Oil&Gas Materials 26 October 2022 12:59 (UTC +04:00)
Europe has enough gas stored to survive this winter - Rystad Energy
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, October 26. Europe has enough gas stored to survive this winter unless it gets very, very cold, said Nikoline Bromander, analyst at Rystad Energy, Trend reports October 26.

“But the continent is not out of the woods yet – with Russian flows continuing to decline, winter 2023 will be even tougher. The temptation in Europe will be to take a sigh of relief and acknowledge the hard work and tough decisions on demand and supply that have been taken. European natural gas prices are currently at their lowest level since June 2022, reaching $28 per million British thermal units (MMBtu) on the Netherlands-based Title Transfer Facility (TTF) on 24 October after dropping 28 percent in the space of a week,” she said.

Bromander noted that the decline is thanks to Europe’s storage facilities now being at high levels, above-normal forecast temperatures for the upcoming European winter, high output from wind power, and political agreement within the European Union on cooperative measures to reduce gas prices and consumption.

“The European Commission announced emergency measures last week which include member states collaborating to jointly procure gas for the first time. The EU will also develop a new gas price benchmark for LNG to reflect its rising importance in Europe’s gas supply mix. In addition, countries will pool at least 15 percent of their gas storage needs next year. No agreement has yet been reached on whether or not to cap gas prices. Countries such as Italy and others in Eastern Europe are arguing a price cap is the best option but others, such as Germany, the Netherlands and Denmark, say it would push up costs and jeopardize supply,” added the analyst.

Bromander went on to add that for now, the EC will investigate imposing a temporary price cap on gas use for power generation and the creation of a dynamic price corridor, limiting intra-day fluctuations in prices.

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