Gas sellers: We're seeing rise in natural gas price looming

Eesti Gaas logo.
Eesti Gaas logo. Source: Priit Mürk/ERR

While natural gas sellers in Estonia were still saying as recently as in July that the price of natural gas was falling and would fall even further, Alexela as well as Eesti Gaas are now both of the belief that the price of natural gas will be going up this fall and winter. Prices this year shouldn't reach last fall's peaks, however.

As of midday Tuesday, the price of natural gas on the Dutch Title Transfer Facility (TTF) natural gas market stood at €36.40 per megawatt-hour (MWh); a month earlier, the price stood at just under €30 per MWh.

Kalvi Nõu, portfolio manager for energy trading at Alexela, said that long-term forecasts also suggest that current gas prices may not hold either.

"Rather, we're seeing a price increase looming," Nõu acknowledged. "But while prices are still more affordable, we recommend domestic consumers start fixing gas prices ahead of the upcoming heating season in order to achieve a stable budget for this fall and winter."

Gas futures prices are continuing to indicate that prices in this year's fourth quarter and in the first quarter of next year will be higher than summertime prices, he added.

Citing an example from recent days, Nõu noted that potential disruptions to Australia's LNG supplies elicited fear on the market, giving way to a rapid price hike.

The price of Eesti Gaas' flexible household plan has fallen a total of 84 percent over six markdowns since last fall's peak, but the price may start to rise as winter arrives.

"September's price will remain the same as in August —€0.46 per square meter plus VAT," Eesti Gaas CEO Margus Kaasik said. "The price of gas is promising to go up toward winter, but since European natural gas storage levels are good, there's no reason to fear drastic price hikes, and the upcoming heating season by all accounts looks to be milder than the last."

Compared with August 2022, the price of natural gas has fallen more than tenfold. This price drop can be attributed chiefly to a robust decrease in gas consumption throughout Europe as well as sufficient LNG supplies from elsewhere in the world.

Nonetheless, the price of gas is currently higher than at the start of 2021, for example, when it stood at €17 on the TTF.


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Editor: Aili Vahtla

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