The price of natural gas has increased by 260 percent over one year. There are signs that troubles in the gas market have not finished yet and, thus, the price might grow further. CapitalPanda summarizes the market situation behind the price turbulences.
According to the commodity exchange was currently the price of natural gas was at the level of €51.74 per 1 MWh (16 November 2021). For comparison, on the same day a year ago it was at €14.36 per 1 MWh. The highest price of gas was reached at the beginning of October 2021, when it climbed over the limit of 66 €per 1 MWh.
The contract for gas with delivery in December 2021 on the Dutch TTF, which represents the gas benchmark for the whole of Europe, climbed to €94 per 1 MWh on Tuesday.
The price of gas is rising on a global scale. And the reason? An energy crisis that is plaguing the whole world. The relaunch of the world economy following the downturn associated with the COVID-19 pandemic did not cope with the "painful" outages following the increase in demand caused by the recovery in economic activity. And that's not all.
The prices of electricity, natural gas, but also coal are rising. The shortage of natural gas was caused, among others, by supply disruptions in Asia, where the supply chain was unable to adapt quickly to the huge increase in demand after the previous significant slowdown.
Hurricane Ida was the reason for the reduced supplies in the USA, while one of the countries most affected by the gas energy crisis is undoubtedly the United Kingdom, where the price of this commodity rose by 420 percent during the year. The problem with this island nation is, in particular, the fact that it relies on natural gas to generate electricity.
The production outages in Norway, which is the second largest gas supplier in Europe after Russia, also pose a problem. This deepens the nervousness of further possible price increases at the beginning of the heating season.
As the heating season only begins, the following months will show how high the price of gas will rise and whether the competent will be able to keep it under control.
