Europe grapples with gas prices as market tensions rise
When the temperature drops, the price of gas rises. In Europe, the discussion about freezing its prices is resurfacing. Such intervention, however, raises significant controversies. Traders, energy exchanges, and financial sector representatives have sent a joint letter to Ursula von der Leyen, warning of "unintended consequences," as reported in "Dziennik Gazeta Prawna."
Natural gas prices in Europe have reached the highest levels in two years. Although they have slightly decreased from the peak value of $61 per MWh in the past several hours, they still present a challenge for the market.
According to the latest data, the gas storage level in Europe currently stands at 48.48 percent, marking the lowest level since 2022.
The situation in individual countries is as follows:
- Germany – 49.2 percent filled,
- France – 30.3 percent,
- Italy – 59.9 percent,
- Austria – 59.2 percent,
- Spain – 69.5 percent,
- Hungary – 52.5 percent,
- Czech Republic – 48.7 percent.
The gas market situation could significantly worsen with a projected 17 percent increase in raw material consumption this month and approaching cold waves in the northwestern part of the continent. Additionally, threats of imposing tariffs by the USA pose a risk to global fuel supplies. This is a wake-up call for the EU, prompting the discussion about price limits to return.
Warnings against market intervention in gas
The journal notes that such intervention raises controversy in the EU. Concerned parties include traders, energy exchanges, and financial sector representatives, who sent a joint letter to Ursula von der Leyen on Tuesday, warning of the "unintended consequences" of intervention and accusing Mario Draghi of relying on wrongly interpreted and incomplete data.
As part of the EU's gas supply security strategy, adopted after Russia's invasion of Ukraine, member states must store gas in a way that ensures at least 90 percent fill before November 1 each year.
