“Football” for 2023 with pre-war natural gas prices

By Chrysostomos Tsoufis

2023 began with the return of natural gas prices to pre-war levels. Throughout the day, natural gas hovered around €73/Mwh, breaking the €73 barrier several times and continuing the downward streak. Such values ​​were to be noted from on February 21 last year, that is, 3 days before the Russians invaded Ukraine. Only in the last 40 days or so its price has fallen 51%, it was at €150 on December 7th.

Europe went on an unprecedented road race and managed to fill its warehouses. On the last day of the year the figures showed that the European underground warehouses were full by 83.3% and LNG terminals by 67%. More specifically:

Germany 90%

France 84%

Belgium 88%

Poland 97%

Austria 87%

Italy 82%

Spain 93%

Portugal 98%

This was helped both by the fact that for a very long time the Europeans were willing to pay as much as they could but also by the fact that China, due to the policy of zero cases, was in essence in hibernation … Consequently the vast majority of LNG ships came to Europe which it was disastrous for countries such as Pakistan or Indonesia that could not compete with the Old Continent in terms of staying for long periods without energy literally.

Good weather is also an ally, with forecasts saying it will remain extremely mild and with seasonally high temperatures until at least mid-January. Also, the time is such that, traditionally, the large, energy-intensive industries are accelerating, while the agreement to impose a ceiling on the price of natural gas has also contributed significantly.

All, however, Institutional actors, European leaders and analysts warn that we are in the calm before the storm. The scene is expected to change when the deep winter arrives in Europe and especially from the Spring when the new warehouse payment season for the winter period 2023-2024 will begin.

Then Europe will have to fill its storage without the Russian gas – about 60 billion cubic meters, 1/6 of its needs – which means that in addition to savings in consumption it will have to attract many hundreds more LNG cargoes so prices will rise . If the Chinese economy, the largest importer of LNG, does not function normally by then, then the competition will be relentless.

At least this year Europe has two important weapons in its quiver. On the one hand, the ceiling – which, as we have explained on skai.gr, is not a fixed price, but a dynamic price range which means that it can constantly increase while the Commission reserves the right to deactivate it in emergency cases – on the other hand, the possibility common supplies as one entity.

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