Russia (bbabo.net), - The behavior of exchange gas prices in Europe this year would be more suitable for stock quotes of a financial pyramid, and not for a solid commodity. From December 10 to 22, prices rose by almost 90% from $ 1,158 to $ 2,180 per thousand cubic meters, and then in one day, December 23, fell to $ 1,200.
The reason for the leaps lies in the unsuccessful reform of the European gas market, which began more than 10 years ago. It consisted in increasing the share of spot contracts to the maximum (quick purchase and payment for a certain amount of gas on the exchange with an agreed delivery date) and gradual abandonment of long-term contracts.
The goals of the reform have been achieved. More than half of the gas consumed by Europe is imported under spot contracts. That is, supplies depend not only on the consumer's desire to buy gas, but also on the supplier's - to sell gas. Now the gas supply on the exchange is limited. But after the abandonment of coal, this is the main resource of European countries for generating electricity. An unmanaged market for such a product carries increased risks for the entire European economy, which has happened this year.
Today's $ 1,200 is also a prohibitive figure, just a year ago gas was traded at $ 240 per thousand cubic meters, and this was considered a very good price by its exporters. Gazprom, Algeria's Sonatrach and several smaller players are currently working under long-term contracts with Europe. The Russian company has fulfilled all its obligations under the contracts and has already supplied more gas to Europe than last year. So where did the record prices come from?
Most importantly, there is no gas deficit in Europe. There is news about a record gas withdrawal from underground storage facilities (UGS), but they are connected not with cold weather and with increased needs of enterprises for gas, but with high prices for it. The maximum gas withdrawal from European UGS facilities occurred on December 21 and 22 (1.4 billion cubic meters), when gas prices soared above $ 2,000, and the weather, for example, in Germany and the Netherlands, was positive. That is, large companies that have reserves in UGS facilities do not seek to buy gas at market prices, but simply pump it out of their storage facilities. And it’s not a fact that they don’t sell it further through the exchange. And there gas is bought by medium and small enterprises, which are on the verge of bankruptcy due to such prices. In addition, Valery Andrianov, associate professor of the Financial University under the Government of the Russian Federation, noted that against the background of the pandemic, the governments of many countries have poured into the economy a huge amount of unsecured money. In the absence of other highly liquid investment areas, part of the funds went to the gas exchange.
There are now more than 60 billion cubic meters of gas in European UGS facilities. The European Union consumes just over 400 billion cubic meters a year. Even without taking into account the ongoing gas supplies from different countries and our own production, only the existing reserves will be enough for two winter months.
At the same time, in Europe, some blame Gazprom for the rise in prices, which is expecting a record profit, others - the calm weather that stopped wind turbines in the North Sea, others - the lack of liquefied natural gas (LNG) due to increased demand for it in Asia, the fourth - the mechanism exchange trading and speculators. But Gazprom hardly sells gas through European stock exchanges this year. The wind turbines brought the European energy industry down, but their downtime was compensated for by an increase in the supply of coal, gas and fuel oil. The Asian market for LNG has always been a premium, and gas exchange trading in the past has led to price reductions.
That is, it’s a matter of market regulation. According to the deputy head of the National Energy Security Fund Aleksey Grivach, the transition to spot gas contracts in the EU took place at the end of the 2000s, but the apotheosis was in the last 5-6 years, when changes were made to most long-term contracts that tied prices to hubs (gas distribution center, to to which the exchange trade is tied .-). The final chord came after the settlement of the EC's antimonopoly claims against Gazprom and the signing of the corresponding adjustments to the gas supply contracts (which linked the prices of long-term contracts to exchange quotations. -).
Now this link has worked in the interests of Gazprom. Is the Russian company to blame for this? Of course not. Did she take advantage of the situation? Of course. Gazprom has no obligations to fill UGS facilities in Europe, as well as to sell additional volumes of gas through European stock exchanges.The rise in gas prices on the European exchange is a direct result of the reform of the European gas market, Andrianov said. Europe has long fought for free pricing. And the current gas quotes are a natural result of such a struggle. Against the background of cold weather in Russia on December 22, a historical maximum of electric power consumption was recorded - 159,484 MW. This requires additional volumes of gas for heating. Therefore, it is not surprising that Gazprom was forced to temporarily stop pumping gas through the Yamal-Europe gas pipeline (this is called one of the main reasons for the rise in exchange prices for gas in the EU above two thousand dollars per thousand cubic meters. -), the expert emphasizes.
There are no complaints from Gazprom's clients, contracts are being fulfilled right down to the last squiggle, but otherwise it is a free market, as the European Commission wanted, Grivach said. In his opinion, now the market is not sufficiently secured by firm supply commitments, but the Europeans have no one to blame but themselves.
Sergey Kupriyanov, an official representative of Gazprom: “All accusations against Russia and Gazprom that we are supplying little gas to the European market are absolutely groundless and unacceptable and do not correspond to reality. and lie "
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