TTF gas prices dip to six-month low
European gas prices slumped to a six-month low on December 20, as Russian deliveries remain stable despite a pipeline blast, LNG supply continues to be amply and the continent enjoys a mild winter.
The front-month TTF contract dropped to €105.7/MWh ($1,200/'000 m3), down 2.6% from the price on December 19. This is the contract's lowest daily average since mid-June. The contract had declined further as of 08:00 GMT on December 22, trading at €98/MWh.
Meanwhile, the front-month UK NBP contract fell to £2.63/therm ($929/'000 m3) on December 20, down 2.5% from the previous trading session, and likewise reflecting its lowest level in six months.
A blast ripped through a section of the Urengoi-Pomary-Uzhhorod pipeline in central Russia that carries Arctic gas to Europe via Ukraine on December 20, leaving three dead. But Gazprom has confirmed that supplies through Ukraine remain stable as it has diverted gas flow to other routes.
The EU finally agreed on a plan to cap the wholesale price of natural gas on December 19, after many months of wrangling. Experts have warned that the measure may not be triggered, but nevertheless could prove harmful to the market.
"After having engineered the worst ever energy crisis due to green dogma, EU political leaders are killing the only tool that managed so far to guarantee security of gas supply," Thierry Bros, energy expert and professor at Po Paris, commented.
Various experts have also warned that the price cap could lead to more trades moving from TTF to the UK NBP point, given the latter is not subject to the measure.
Anne-Sophie Corbeau, energy expert at Columbia University's School of International and Public Affairs, described the price cap as "dangerous."
"Politicians wanted to show that they can do something," she told NGW. "They don't understand all the unintended consequences. This will affect the way people trade and maybe how we attract supply and how we consume."