Untimely cold: Europe missed the best time to stock up on gas

The cost of gas on the European market continues to fall, as does the interest in it from spot sellers. However, fuel is supplied under long-term contracts. European natural gas futures posted their biggest weekly drop so far this year, Bloomberg writes, as weak business activity dampens demand and supply concerns ease.

The nearest monthly benchmark contracts fell 3,4% this Friday after the trading session, losing up to 19% of their original value in a week. Prices for contracts with day-ahead delivery also fell. In this situation, many traders simply took the goods to Asia, where quotes are higher and more stable. The freedom of these entrepreneurs is sadly viewed by suppliers who have long-term contracts and are obliged to sell their expensive raw materials to the EU at any price.

As the heating season draws to a close, fuel stocks in the Eurozone's underground gas storage facilities are currently at around 56%, meaning less gas than usual will need to be replenished in the summer. However, experts warn that there is one significant problem.

Now, when prices have dropped abnormally (as for this time of year), and fuel supplies are at a high level, it would be possible to start pumping additional volumes into UGS facilities, as logic and expediency dictate. But due to the still insufficient temperature, gas operators are still forced to buy gas for generation, not storage.

Such an untimely cold forces all new supplies to be sent to generate heat and electricity, which ruins plans for next season. Still, 56% of the reserves, although it is an impressive volume, is clearly insufficient for the successful passage of the winter. But Europe cannot start doing what is profitable and practical (stocking up fuel off schedule). She is not in a position now to choose a model of behavior, and time has already been lost.

By the time the cold finally leaves Europe, and demand revives against the backdrop of the start of the calendar (according to plan) replenishment season, prices will creep up and an opportunity, like these days, may no longer be presented. The imbalance of the market makes itself felt, and recently in the EU everything is out of time and out of time in the energy sector. And its survival, as winter has shown, is due to a happy accident, but not to strategy, tactics or economy.
  • Photos used: pixabay.com
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  1. viktor goblin Offline viktor goblin
    viktor goblin (viktor goblin) 19 March 2023 10: 41
    Worried about the problems of partners! Don't have yours? The fate of Milosevic teaches nothing. The role of the cat Leopold will definitely not lead to good things ..
  2. Vox Populi Offline Vox Populi
    Vox Populi (vox populi) 19 March 2023 11: 00
    The imbalance of the market makes itself felt, and recently in the EU everything is out of time and out of time in the energy sector. And its survival, as winter has shown, is due to a happy accident, but not by any means to strategy, tactics or economy.

    Well, yes, the EU will again "freeze and go bankrupt" ... winked
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 19 March 2023 11: 56
    Someone "crazy" on the topic of gas for Europe.
    maybe that, maybe that, but they anonymously pour noodles on their ears just to work out the training manual ... so that the PF people don’t worry about nerves anymore ...
  4. Paul3390 Offline Paul3390
    Paul3390 (Paul) 19 March 2023 12: 42
    Geyropa was able to successfully pass the winter only because someone - strenuously drove gas there all spring and all summer, despite the war .. Now - this is no longer possible. Besides - it is not known what the summer will be like. At +40, air conditioners consume energy no less than heaters at -30 ... So - in half a year we'll have a look ..
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  6. In passing Online In passing
    In passing (Galina Rožkova) 19 March 2023 20: 40
    High prices affect the price of gas for the population and energy-intensive businesses. Worth a howl. Traders also supply expensive gas without doing charity work. And the new gas with new prices is still far away. There will be a hot summer, and then, perhaps, a cold winter. And the market will fix everything. Let's see. And do not scold Miller, he hit his jackpot while it was possible. By the way, that's how gas works.
  7. alsi61 Offline alsi61
    alsi61 (Alexey) 20 March 2023 06: 09
    We sell gas, and they give us candy wrappers. Prices will rise - more candy wrappers will be printed. We used to buy cars, manufactured goods, cosmetics with candy wrappers. Now there are no sanctions. What is the meaning of our trade? Until the sanctions are lifted, there is no point in trading. And the sanctions will not be lifted as long as we continue to supply gas for candy wrappers. Wrappers can be devalued, frozen, devalued. It's not even beads and vodka. Are we Indians or savages?