Gas prices in Europe dropped to two-year low
European natural gas prices declined further to the lowest level in nearly two years as a weak regional economy is affecting demand prospects.
Bloomberg reported.
"Germany suffered a recession in the first quarter, highlighting the continent’s struggle in emerging from a crisis that was partially created by record-high energy costs last year.
Industrial demand for gas in Europe has been sluggish despite the recent dip in prices, resulting in an oversupplied market.
Much fuller-than-normal inventories and strong availability of liquefied natural gas are also quickly taking away any risk for the next winter. At the same time, the 60% slide in gas futures this year has brought some relief for Europeans suffering from surging inflation. British consumers are set to see 37% lower energy bills from July," the agency wrote.
Therefore, the quotes of the European benchmark in Amsterdam fell by 3.2%, to 26.9 euros per megawatt-hour. It slumped almost 8% in the previous three sessions.
The UK equivalent of the contract fell 2.6% on Thursday.
The Dutch TTF Hub June Futures Price as of 10:25 a.m. Kyiv time decreased to USD 297.06 per thousand cubic meters, or EUR 26.8 per MWh, according to the ICE Exchange.
A week ago, it became known that the price of natural gas in Europe for the first time in recent years fell to the level of June 2021.
Around 04:00 p.m. on May 18, the Dutch TTF futures contract, which is considered the European benchmark, was trading at EUR 29.9 per megawatt-hour, and then rose to EUR 30.
Now the UK consumers are set to see a big drop in energy bills that have been crippling household budgets since the start of the war in Ukraine.
Natural gas prices have been steadily declining since the end of last year, and this will finally feed through to hard-pressed consumers. From July, average bills are set to fall 17% below the current level guaranteed by government subsidies.
The European Union has slowed purchases of gas to fill storage facilities expecting further price reductions, according to media reports.
For comparison, in August 2022, when the heating season was approaching and there were still serious concerns about how Europe would pass the winter, gas was trading at EUR 300 per megawatt-hour.
As The Gaze previously reported, the owner of the Polish section of the Yamal gas pipeline, Europol Gaz, filed a claim against Russia's Gazprom for a total amount of about PLN 6 billion.
The claim concerns overdue accounts receivable and lost profits.