The European gas price rose by about 20 percent on Monday, the strongest increase in about three months. The reason is signals that the market is tightening due to the possible higher demand for natural gas in Asia, writes the financial news agency Bloomberg.
The price of gas on the leading Dutch futures market TTF rose to 29.36 euros per megawatt hour on Monday, more than 23 percent more than on Friday evening. That is a significant increase, but the gas price is still relatively low compared to the previous months. At the beginning of this year, natural gas was still trading at around 70 euros per megawatt hour. in the summer of last year, an absolute record of more than 300 euros per megawatt hour was even recorded. Europe then experienced its worst energy crisis in decades due to the Russian war with Ukraine.
The market has calmed down in recent weeks, but people are looking with suspicion at the coming winter. Russian gas, which is transported through pipelines, does not immediately return to Europe, so supply is becoming tighter. Analysts also fear increasing competition with Asia for the supply of liquefied natural gas (LNG). Bloomberg data shows that it is currently more cost-effective for US LNG ships to supply Asia, due to prices on the futures market through September.
In addition, the financial press agency also sees a link with Saudi Arabia’s announcement to pump less oil from July. Long-term LNG contracts are often linked to oil, it is said.
Bloomberg therefore does not exclude that the gas price in Europe will rise even further. “Low demand has kept prices low so far, but this masks the small buffer for next winter and the possible recovery of demand in Asia in the second half of the year.”
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