Natural gas price falling and no spikes forecast for home consumers this winter
The price of natural gas has dropped to 2021 levels and gas sellers told ERR they don't expect it to rise significantly for household consumers this fall and winter.
The global market price of natural gas has now dropped so far that it's returned to the levels seen in the summer of 2021 — that is, back to where it was before Russia launched its full-scale invasion of Ukraine.
As of Thursday, the price of natural gas on the Dutch TTF gas exchange was €31 per megawatt-hour. For comparison, the price briefly spiked to nearly €60 in February of this year, but has been trending downward since. Over the past three months, it has hovered between €30 and €35 per megawatt-hour.
"The gas market is currently stable. New supply chains are in place and the price of gas has fallen back to summer 2021 levels. Current forecasts suggest it will remain around this level through the upcoming heating season," Kristofer Vähi, head of portfolio management and optimization at Elenger, told ERR.
Vähi said the price for residential customers — €0.54 per cubic meter since June — will remain the same in November. What happens after that will depend on global market prices, especially those on the TTF exchange, which is used to source gas for the Estonian region.
Kalvi Nõu, head of energy trading at Alexela, also told ERR he doesn't believe gas prices for household consumers will rise this winter.
"Compared to last winter, prices will likely be 20 to 30 percent lower and they probably won't go up from where they are today," said Nõu.
Last December, gas prices on the TTF exchange fluctuated between €40 and €50, rose above €50 in January and peaked at €58 per megawatt-hour in February.
Still, a price rebound this fall cannot be ruled out, Vähi noted, because the current balance is still fragile and there are many variables at play.
"The global market is increasingly supplied with U.S. LNG, but large-scale growth in supply will take a few more years. In Europe, storage levels are somewhat below the historical average, which means that cold weather or unexpected events could cause price volatility," he said.
Nõu, however, pointed out that due to the increased LNG production capacity compared to last year, the risk of a gas shortage in the European Union has become minimal, and that's reflected in the prices.
"In theory, factors that could drive up gas prices include cold weather and forecasts, geopolitical developments or problems with LNG export capacity," he added.
According to Nõu, gas storage in the EU currently stands at 82.5 percent of maximum capacity and will likely increase somewhat further before the active heating season begins.
There are no supply issues in Estonia's region either, Vähi said.
"There are no problems with supply security in the Baltic region and overall the situation is stable. In addition to ongoing LNG deliveries, the region's gas needs are buffered by Latvia's very large underground storage facility," he said.
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Editor: Marcus Turovski
