The price of gas falls to levels of 17 months ago, before the Ukraine war

Natural gas futures in Europe fell below 50 euros yesterday for the first time in 17 months, that is, to pre-war levels in Ukraine.

Thomas Osborne
Thomas Osborne
17 February 2023 Friday 16:32
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The price of gas falls to levels of 17 months ago, before the Ukraine war

Natural gas futures in Europe fell below 50 euros yesterday for the first time in 17 months, that is, to pre-war levels in Ukraine. Since August, when prices peaked, prices have fallen by about 80%. So far this year, the correction is 35%. Of course, if it is compared with the levels of the same period of 2019, we are still more than double that then.

Behind this change in trend there is a relatively mild winter climate (which reduces consumption), the efforts of European countries to reduce energy consumption, the high level of reserves and the strong inflows of liquefied natural gas from the US. and Qatar to Europe, to compensate for the embargo on those coming from Russia.

How far can this downward phase go? Analysts explain that we are actually close to the ground, because, after a certain level, if gas becomes too cheap, it becomes suitable again as a fuel to power power plants at the expense of coal, which becomes an energy source. comparatively more expensive, which ends up increasing the demand for gas again. In this way, prices could rise again.

To this we must add the increase in gas consumption from China, now that the covid restrictions have been lifted, which could reinforce an upward movement in the coming weeks.