Oct 7, 2021
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Gas prices in Europe predicted to increase by one and a half times

Gas prices in Europe in the near future may surpass the $ 2,500 mark per 1,000 cubic meters. This is the conclusion reached by analysts interviewed by the Izvestia newspaper.

On October 6, the price of gas futures in Europe once again hit a historic maximum, reaching the level of $ 1,900 per 1,000 cubic meters. However, experts predict further growth in the cost of natural gas.

“Prices continue to grow steadily, and at this rate they can reach $ 2,500 per thousand cubic meters and more this week. The factor of psychosis and the unlimited possibilities of speculators makes it difficult to forecast based on technical or fundamental analysis, ”said Andrey Loboda, an expert in the field of financial communications.

According to experts, there are several reasons for the rise in prices. One of them, according to Natalia Milchakova, deputy head of the Alpari IAC, is the too frivolous attitude of European officials to traditional energy resources: they were declared environmentally dirty and obsolete.

In addition, a cold winter, an increase in consumption in China, a decrease in LNG supplies to the European market and a low volume of gas reserves in European underground gas storage facilities after a cold winter and hot summer period may also lead to higher prices, said the head of analytical research at Univer Capital. Dmitry Alexandrov. Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, also calls the stock exchange panic in the European market as one of the reasons.

For the European Union, a rise in gas prices may mean higher inflation and higher costs for businesses, as well as a decrease in demand for gas, since it has become unprofitable to buy it at ultra-high prices. The situation could be rectified by the launch of the Nord Stream 2 gas pipeline, as well as a decrease in gas consumption in China. According to analysts, this will free up additional volumes of liquefied natural gas (LNG) for Europe.

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