“Nord stream-2” may reduce the price of gas in Europe

Gas prices in Europe will remain at a high level this year. Still, a rapid launch of the “Nord stream-2” gas pipeline, for example, may lead to a decrease, Warren Patterson, head of the commodity strategy department at ING International Bank, told.


The price of gas on the European futures market continues to grow actively; only in the first few hours of trading on Tuesday, it added more than $ 50 (7%) and, for the first time in history, exceeded the mark of $ 800 per thousand cubic meters. At the moment, the product goes for $ 810. Since the beginning of last week, the cost of gas in Europe has increased by 25% (on September 6, the October futures cost $ 650), and for a month – by one and a half times (on August 13, gas was traded at $ 543).


“I expect that the good support of European gas prices will continue until the end of the year. This is due to the fact that the reserves in the region are much lower than average, as well as the fact that demand will grow as we enter the heating season. I believe that prices will remain high in winter,” the expert said.


There are, however, several factors that can lead to a price correction, he added.


“First, if we see the rapid launch of “Nord stream-2,” it will help to improve the supply picture. Secondly, the current price level in Europe is higher than the spot prices for LNG in Asia. Thus, we should see increasing volumes of LNG supplies that go to Europe and not to Asia. If we see that large volumes are being redirected to Europe, this may somewhat suppress prices,” Patterson said.


In this regard, he noted that any producer, including from the Russian Federation, will benefit from the current high cost of “blue fuel.” Still, prices are at a very attractive level for LNG exporters from the United States, even though the cost of gas in the States has also increased.

If you have found a spelling error, please, notify us by selecting that text and pressing Ctrl+Enter.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Author: Ivan Maltsev
The study of political and social problems of different countries of the world. Analysis of large companies on the world market. Observing world leaders in the political arena.
Function: Chief-Editor
Ivan Maltsev

Spelling error report

The following text will be sent to our editors: