Here's some great news for all you Europeans over there across the pond:
Yes, after all the hype concerning the "skyrocketing" prices of natural gas in Europe it looks like the tiny continent has caught a bit of a break.
In a strike of amazingly good luck, it's been the unusually warm fall weather which has allowed the continent to stock up an excess of natural gas, leading prices in some markets to literally dip below zero.
Yes, below zero!
The price of benchmark European natural gas futures has dropped 20% since last Thursday, and by more than 70% since hitting a record high in late August. On Monday, Dutch gas spot prices for delivery within an hour — which reflect real time European market conditions — dipped below €0, according to data from the Intercontinental Exchange.
Prices turned negative because of an "oversupplied grid," Tomas Marzec-Manser, head of gas analytics at the Independent Commodity Intelligence Services (ICIS), told CNN Business...
Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie, says unseasonably mild weather is largely responsible for the dramatic change in fortune.
"In countries like Italy, Spain, France, we're seeing temperatures and [gas] consumption closer to August and early September [levels]," he told CNN Business.
So yeah, this is extremely good news for our friends over in Europe. It seemed just a few weeks ago as if we were headed for a winter of despair and that we'd have people fighting in the streets over firewood once January came around.
Well fret no more, Europe.
That is, until next year at least:
Despite the recent slump, at around €100 ($100) per megawatt hour European natural gas futures are still 126% above where they were last October, when economies started to reopen from their pandemic lockdowns and demand spiked…
And despite the fact that Russia's share of Europe's total gas imports has fallen from 40% to just 9%, the region could be in a difficult spot next summer as it tries to replenish its stores ahead of the following winter.
Prices are expected to hit €150 ($150) per megawatt hour by the end of 2023, said Bill Weatherburn, a commodities economist at Capital Economics.
Well, let's hope this mild autumn continues and that Europeans can continue to conserve as much natural gas as possible heading into winter.
And let's not forget that whole war between Ukraine and Russia. Maybe we could find some diplomatic ways to put an end to that as well.
Just sayin.
