Gas prices continue to fall in Europe and are already down 25% in one month
CE Noticias Financieras
Natural gas prices in Europe continue to slide for the third day in a row, thanks to warmer-than-normal weather that is sharply reducing demand on the continent. Benchmark futures have fallen as much as 4.8% on the day, after weather forecasts point to warmer-than-normal temperatures set to return in a matter of days as this week's cold snap passes. Add to that the forecast for higher liquefied natural gas (LNG) supply, thanks to the restart of a key export terminal in the US. Strong LNG supply growth and high gas stocks, which are well above normal thanks to reduced consumption and a relatively mild winter, have significantly reduced fuel prices in recent weeks. As a result, some politicians and economists are beginning to suggest that the worst of Europe's energy crisis may be over. "We can afford to be more optimistic," Deutsche Bank analysts said in a note this week. "Gas storage has increased and gas prices have fallen. Inflation is falling and uncertainty is easing." The business outlook for Europe's largest economy, Germany, has been improving for days, and forecasts of a recession have cooled decisively with the latest economic data. "The most important risk for the German economy was that of a gasoline rationing scenario," Ifo economic research institute President Clemens Fuest told Bloomberg TV on Wednesday. "That risk is no longer on the table." The price on the Dutch gas market, the continent's benchmark, has fallen about 25% so far this month. Still, traders remain focused on uncertainty about demand in China. The country's economic recovery could keep the market tight this year, Meg O'Neill, chief executive of Woodside Energy Group, Australia's biggest exporter, said Wednesday. But while risks remain, gas prices in Europe are expected to stay within a range of 50 to 100 euros this year, according to Deutsche Bank. While still higher than the historical average, they are well below the peaks reached in the spring and summer of 2022, giving hope that the European energy market can be normalized.