Do European gas prices triple in winter?

Do European gas prices triple in winter?
Do European gas prices triple in winter?

Expectations indicate that gas prices will rise in Europe during the second half of this year, and may reach about three times their current levels in the winter, as analysts at the American investment bank “Goldman Sachs” believe that European gas prices in recent months came less than expectations Mild winter prompted British households to increase use.

The bank’s analysts expected a recovery in gas demand in the coming period, as households respond to lower prices by using more gas, adding that the British expansion of use in light of the increased demand for liquefied natural gas in other parts of the world, in addition to the dangers of winter weather, may push gas prices. wholesale to over €100 ($109.7) per MWh.

Gas prices are currently around 36 euros ($39.4) per megawatt-hour, having fallen sharply recently as gas stocks in the European Union and Britain filled to their highest levels with the approach of winter.

Data from the gas company “Infrastructure Euro” on March 1 showed that inventories reached a seasonal record of 685 TWh, with a fullness rate of approximately 61 percent, which exceeds the seasonal average for gas stocks of 39 percent for the past decade.

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In addition, data in April showed that European demand for gas came less than expected in northwestern Europe, driven by weak end-user demand and weak pipeline exports to southern Europe.

Goldman Sachs explained that “the recovery of European demand, which was less than expected, does not mean filling the market deficit,” adding that “even if industrial demand remains sluggish this summer, this does not guarantee that storage will be sufficient throughout the winter, as there are no Only a large capacity to store gas before the heating season.”

The American Investment Bank expects that “the rise in gas prices in the second half of 2023 will increase the suffering of British and European families, who are still suffering from pressures on living standards as a result of high energy and food prices,” noting that “this matter may enhance Russia’s financial resources.” He pointed out that “Russia provided nearly a quarter of the European Union’s gas imports from January 2022 to November of the same year.

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