European gas price reaches lowest level in two years: 25.35 euros per megawatt hour

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The European gas price has fallen to the lowest level in almost two years. The price of a megawatt hour of gas fell by almost nine percent to 25.35 euros yesterday, but we are not completely out of the woods yet, thinks energy expert Jilles van den Beukel of the The Hague Center for Strategic Studies.

The European gas price has fallen to the lowest level in almost two years.  The price of a megawatt hour of gas fell by almost nine percent to 25.35 euros yesterday, but we are not completely out of the woods yet, thinks energy expert Jilles van den Beukel of the The Hague Center for Strategic Studies.
The European gas price has fallen to the lowest level in almost two years. The price of a megawatt hour of gas fell by almost nine percent to 25.35 euros yesterday, but we are not completely out of the woods yet, thinks energy expert Jilles van den Beukel of the The Hague Center for Strategic Studies. (mauritius images/EastEnd72)

Because although the prospects for next summer are good, he emphasizes that we are in a different situation for the longer term. “We are not going back to normal yet,” said Van den Beukel. “Prices may have returned to fairly normal levels, but the situation is not. We have to continue to do without most of the Russian gas, and that means a lot of European LNG imports and a lot of demand reduction.’

‘We are not going back to normal yet’

Jilles van den Beukel

In addition, according to Van den Beukel, the price for a megawatt hour in winter is already 50 euros. “And that’s a very big difference.” Possibly the now replenished gas reserves – just like last winter – can play a role in this, he thinks. “It has to be reviewed every winter,” he says. ‘This winter went well, and reserves remained at 55 percent of the level. Now we are at 60 to 65 percent, so there is little need to add this summer.’

‘Crisis over’

In the AD, Belgian energy trader Matthias Detremmerie argues that Europe was ‘too fast for Putin’ and that European independence has been confirmed. According to Van den Beukel, he is partly right about that. “The crisis is indeed over, but the difficult situation is not yet,” he continues. “Now it’s time to see how things go in the new world without Russian gas.”

He emphasizes that the supply of energy has not only changed drastically, consumption has also fallen considerably. ‘Industrial demand in particular has fallen,’ he points out. ‘That is also one of the questions analysts are now asking themselves: how quickly will industrial demand in Europe pick up again?’

The same question can be asked about the market in Asia, and the same answer will follow: it is all increasing slowly. Van den Beukel: ‘Last year’s extremely high gas prices were not good news for the future of gas.’


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