Depleted storage levels and concerns about steady levels of supply have put a substantial premium on the price for natural gas in the European economy.
The January gas delivery contract at the Dutch TTF hub was dropping during the December 3 session to trade in the lower €91 ($103)/MWh range, though prices at this point last year were in the upper teens.
Marco Alvera, the CEO of Snam, Europe’s largest gas storage operator, said cold winter and the subsequent increase in demand could deplete gas storage levels to a «dangerous» point:
- If this is a cold winter, we’re in real, real trouble
From January through November, exports are about 11% below pre-pandemic levels.
Bloomberg reported the Italian government warned earlier this week there may be blackouts should gas shortages continue.
Alvera said those likely would not last long, though he said industrial end-users may be asked to voluntarily cut back as a stop-gap measure.
Data from Gas Infrastructure show European gas storage levels at 66% capacity, below the 85% found in the 10-year average for this time of year.
Author: Daniel Graeber