Sharp drop in European gas price as countries hurry to fill reserves

Sharp drop in European gas price as countries hurry to fill reserves
Credit: Belga

The European natural gas prices saw a sharp drop on Monday morning, after it became known that Germany is filling up its gas reserves faster than the average expectation. Germany wants to be well-prepared for the coming winter.

The price on the leading Amsterdam gas exchange fell by 16% before the exchange, to €286 per megawatt-hour (MWh). Last week, prices rose by 40%.

According to the German Economy and Climate Minister Robert Habeck, the German warehouses are filling up quickly. The target of filling 85% of the gas storage by October is expected to already be reached by September, and the target for September was also reached last month.

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The supply of gas, however, remains a sensitive issue. The gas flows from Russia are smaller than before. In addition, there are also concerns about future deliveries via the Nord Stream gas pipeline between Russia and Germany, which will be shut down due to maintenance.

However, Norwegian gas production also suffers from disruptions. Furthermore, competition in the market for liquefied natural gas is fierce.

Governments are also taking measures to ease the burden on households, among others, and have set aside about €280 billion for it – but the question is whether that is enough.

The Czech Republic, which holds the rotating presidency of the European Union, is convening energy ministers from EU member states to discuss solutions for the entire country bloc.

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