There is much discussion surrounding the expected pricing dynamics for gas and electricity in the upcoming winter of 2024. Some voices are concerned about a new normality setting in, which could significantly impact price fluctuations, pushing gas rates to oscillate between 30 and 50 euros per Megawatt hour. On the other hand, there are those who believe that the primary driver of electricity prices, specific fuel costs, will likely hover around the 40 euros per Megawatt hour mark on the Dutch trading platform TTF. This represents a departure from the pre-crisis levels of 20 euros per Megawatt / hour.
We find ourselves in this new normality, characterized by natural gas prices swinging between 30 and 50 euros per Megawatt hour,” underscores Stamtsis. He explains that the dwindling quantities of Russian gas have left Europe vulnerable to unforeseen events.
Even the mere prospect or fear of an event, such as the anticipated Australian strike that, ultimately, did not materialize, has the power to send gas prices on a rollercoaster ride. This market is poised to remain volatile.
In terms of natural gas, Europe’s storage levels are currently at their highest point in the last five years, with storages nearly brimming. This is a significant 25% increase from the same period last year, according to the energy strategist and director of the Greek Energy Forum.
Despite sporadic concerns about potential supply disruptions from LNG plant strikes or technical glitches with pipeline gas from Norway, he anticipates that reduced energy demand due to the ongoing and likely deepening global economic recession during the winter will keep competition from Asia in check and maintain prices at relatively low levels, close to 40 euros per Megawatt hour.
According to the Doctor of Engineering from the University of Duisburg-Essen, “In this new normality, we can expect such episodes of fear-driven gas shortages, even if Europe’s warehouses are currently 90% full.”
When it comes to electricity prices, wholesale electricity prices in Europe are also expected to remain reasonably stable. The only concern is the prices of lignite, which in several countries will once again play a pivotal role in determining the system price.
For Greece, it is essential that prices and supply adequacy align with European markets to maintain stability and prevent sudden disruptions. It is important to note that all these forecasts are contingent on the situation in the Ukraine war not deteriorating further, as this could always impact events in Europe.
Regarding oil prices, although it is reasonable to assume that OPEC+ will continue its efforts to bolster prices, the significant reduction in demand due to the recession is expected to exert downward pressure, potentially pushing prices below the $80 per barrel threshold.