Gas price collapse puts Putin out of the game with Nord Stream

The saying goes that everything that goes up, often goes down. The collapse of natural gas prices in Europe is a good example of how you can go from historic highs to lows that also break all records. The price of the Dutch TTF with delivery in February 2022, the current reference of the Rotterdam gas hub, This Friday, December 31st, it plummets 24%, to 65 euros per MWh.

In this way, the price draws a 65% cheaper (or 116 euros) ten days later of setting all-time highs above 18 euros. At the auction of Mibgas in Spain, the price of gas fell to 76 euros on Thursday and this Friday another 18% has plummeted, to 62 euros / MWh.

LNG tanker unloading gas in a port.

Market sentiment has turned sharply from bullish to bearish after supply tensions have cooled. Europe has been able to shake off pressure from Russia and its land gas pipelines with the massive arrival of fuel through methane tankers with LNG from different parts of the world but, especially, from USA and Canada.

Spain safe with Algeria

For example, Spain has come to hire boats to Australia, another of the newcomers to the natural gas market, the fuel that is being used in the electricity industry to supply the Coal Yet the nuclear as system backup to renewables, whose production is unstable and cannot yet be stored with current technology. In fact, for the first time in several weeks, the The price of electricity fell at the beginning of the week below 100 euros per MW / h due to the absence of gas in the auction.

According to the latest supply data from Cores, the state government agency, Algeria in October it remained the main gas supplier for Spain with 34%, although there was a decrease of 15 points due to the closure of the gas pipeline Magreb passing through Morocco. The part arrived from USA, which increased to 25% of the gas served, Nigeria and Qatar. However, Russia has little significant weight for Spain both in gas and oil unlike other European countries such as Germany.

Precisely, the great energetic chess game has been played in these two weeks with the pressure from Moscow to get Berlin approve the gas pipeline Nord Stream 2, which crosses the Baltic Sea and directly links Russian and German gas pipelines for the first time. Until now, the fuel had to go through Poland, Ukraine or Turkey before reaching large European consumers.

Control point of a natural gas pipeline.

Russia runs out of unsold gas

However, the market turn has come after Germany has started to return gas to Poland repeatedly for days through the Yamal-Europe infrastructure due to its high price. Additionally, the German gas regulator assured that Nord Stream 2 is not expected to be approved until the second half of 2022.

This double German show of force with the backing of its European partners and imports from other countries have prompted several conciliatory statements from the Kremlim. “The Nord Stream 2 is ready to go”, said the Russian president on Wednesday, Vladimir Putin, during a telematic meeting in which he announced that the gas pipeline was already filled from the Russian side and ready to operate.

“As soon as they make the decision to start the works, large volumes will begin to be pumped into Europe, additional volumes of Russian gas. I remember that it is 55,000 million cubic meters per year “said the Russian president in a show of weakness, according to analysts, due to his dependence on energy trade with Europe.

Russia send around the 95% of its total gas exports to Europe, almost 95% via gas pipelines, which represents around 30% -35% of Europe’s supply in general and is on par with Norway, the other major gas supplier. Regarding the oil sector, 50% of crude exports of the country also go to Western Europe and 65% do so through pipelines. It represents around 25% to 30% of Europe’s supplies in general.

Source: LA INFORMACIÓN – Lo último by

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