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Violent turnaround in gas prices in Europe, two factors behind the 60% sboom from highs

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Over -60% from the maximum for gas prices in Europe. The futures maturing in February on gas linked to the TTF, the wholesale price of gas in Europe, today fell by a further 6% in the area of ​​66 euros per megawatt hour, to then rise again in the area of ​​73 euros. The last 8 sessions had all been characterized by decreases in prices.

In December, European gas recorded a balance of -30% after prices had shot up before Christmas to all-time highs in the 180 euro area due to the decline in confidence in the arrival of more gas from Russia.

What triggered the price turnaround

To favor the deflating of the upward pressure on gas prices is easing worries that supplies may be missing during the winter. On the one hand there is the materialization of the arrival of liquefied natural gas from the USA to Europe, on the other hand the mild temperatures should help reduce the demand for fuel.
Triggering the sharp drop in gas prices from the pre-Christmas tops was news of US oil tankers starting to head for Europe. According to ship tracking data compiled by Bloomberg, global liquefied natural gas exports jumped to a record last month with Qatar, the United States and Australia – the world‘s top three exporters of super-cooled fuel – all boosting. production in December compared to the previous year.

“Gas prices in Europe dropped significantly in late December, driven by lower heating demand (as temperatures rose significantly above normal) and increased LNG supply as Asia shrank. moderate its LNG imports ”, notes today’s report by EnergyScan by Engie. On the one hand, LNG imports into China fell by 1.4% yoy in December, on the other hand there was a sharp increase in LNG flows to Europe in December (+ 19% m / m + 42% y / y).

High gas prices have pushed energy costs to record highs and fueled inflation. For Italy at the end of 2021 the frozen shower of + 55% for electricity and + 41.8% for gas arrived announced by the Regulatory Authority for Energy, Networks and the Environment (Arera) for the first quarter of 2022. Increases in addition to those already substantial in the third quarter of 2021 (+ 9.9% for electricity and + 15.3% for gas) and the 4th quarter of 2021 (+ 29.8% for electricity and + 14.4% for gas). A record sting of 1,008 euros per family (441 euros for electricity and 567 euros for gas), according to the calculations of the Consumers Union and 1,119 euros according to the Codacons.

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