Europe’s Largest Economy May Face Wild Gas Price Volatility This Winter

• Posted in OilGas
• on October 16, 2023
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LNG demand in Asia and Europe is beginning to rise ahead of the peak winter season amid a calmer market compared to last year’s chaos and record-high prices. But neither Europe nor Asia should be complacent about winter gas supply as winter weather, delivery disruptions, and geopolitical tensions could upend the LNG market once again and send prices soaring.

Last week, spot LNG prices in Asia for November delivery slumped by 10% week-on-week to $13.5 per million British thermal units (MMBtu) amid soft demand and warm weather, industry sources told Reuters. Europe’s benchmark natural gas prices were also down amid high inventories at storage facilities in the EU.
Ahead of the 2023/2024 winter, gas storage sites in the EU were 97% full as of October 9, according to data from Gas Infrastructure Europe. Europe hit its target to have storage 90% full by November 1 months in advance.

But this week, the gas market felt the heat of sudden supply disruptions and European and UK benchmark prices surged. The front-month Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, soared by 15% on Monday and by another 12% on Tuesday after a leak shut down an offshore pipeline between Finland and Estonia.

One year after the Nord Stream pipeline blasts, the specter of sabotage on critical energy infrastructure in Europe is back.

“Based on information from the Finnish Border Guard, Gasgrid Finland has given its expert assessment according to which the damage was not caused by the normal gas transmission process,” gas grid operator Gasgrid Finland said on Tuesday.

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