Energy crisis: European gas prices are in the hands of other countries

The European gas market has been much more stable at the start of this winter thanks to full storage tanks and stable supplies of liquefied natural gas (LNG).

Khủng hoảng năng lượng: Giá khí đốt ở châu Âu 'nằm trong tay' quốc gia khác - không phải Nga

Gas prices could continue to rise in Europe. (Source: en-former)

But even if the European Union (EU) manages to get through this winter without major disruptions or shortages in gas supplies, it will still have to contend with the fact that natural gas prices are being determined elsewhere, including in Australia, Japan, China and the United States, experts warn.

“Europe has no problem buying LNG, but the price it pays for gas will be determined elsewhere,” wrote market analyst John Kemp of Reuters .

Growing reliance on LNG, which has largely replaced Russian pipeline gas supplies, makes Europe more vulnerable to global supply and demand issues.

Oil Price notes that a strike at an Australian LNG export terminal, a fire at a US export plant or a severe cold snap in Japan and China will immediately impact the price of European benchmark natural gas, as has been evident over the past two months.

“Gas storage is full, but this does not mean energy security,” said Diego Pellegrino, trader and CEO of Eroga Energia.

Data compiled by Gas Infrastructure Europe (GIE) shows that gas storage across the EU is currently at a record high, with stock levels now 20% higher than the average of the past 10 years.

In Europe, benchmark natural gas prices were mixed this week, as traders weighed higher heating demand amid colder weather, despite near-full storage volumes.

Experts say that with the cold winter weather approaching, gas prices could continue to rise, at least in Europe, due to a surge in demand. Risks to prices remain due to transportation challenges and disruptions in the Middle East.

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