Urgent.. Natural gas prices in Europe may fall below zero
Natural gas prices in Europe are expected to fall further due to weak demand from power generation and industries.
Natural gas prices in Europe
According to Oilprice, this declining trend has prompted traders and industry authorities to anticipate the potential of day-ahead prices falling below zero in some European markets during the summer.
Several reasons, including large inventories following a mild winter, steady LNG imports, and poor demand, have all contributed to this predicament, according to the research. As a result, As European benchmark natural gas prices have fallen for eight weeks in a row, the longest losing streak in over six years.
While the benchmark price is unlikely to slide below zero, certain specific day-ahead prices in Europe may briefly dip below zero if demand stays weak and renewable power supply is robust.
According to the report, according to Peder Bjorland, vice president for gas trading and optimisation at Norway's Equinor, "individual regional gas markets in Europe could go negative when you have hours and days with renewable production." The current trend contrasts sharply with last year, when benchmark prices skyrocketed to as high as $322 per MWh in August.
As the rise was triggered by Russia limiting its pipeline supply, which raised concerns among governments and businesses about probable winter gas shortages.
Europe survived the winter of 2022-2023 without facing gasoline shortages or rationing due to milder winter weather, lower EU consumption, and the destruction of demand in industries due to rising energy costs.
Moreover, Natural gas inventories in Europe are now comfortable for this time of year. According to Gas Infrastructure Europe, as of May 24, gas storage stations in the EU were 66.71% full, the highest level in at least a decade for this period.
