How Low Can European Gas Prices Go?

摘要

At around $4.20 per million Btu, average hub prices in Northwest Europe are now at their lowest since November 2009 and are roughly 30%-35% down on levels this time last year. In Southwest Europe, LNG spot prices have similarly dropped around 30%, with cargoes for late February delivery understood to be changing hands for around $4.80/MMBtu (p8). And traders and investment banks alike think prices have slightly more room to fall over the next five months, pressured down by lower oil prices, weak non-weather related demand and ample supply. Latest WGI assessments show day-ahead prices on the UK National Balancing Point (NBP), Europe's biggest hub, dipping to $4.18/MMBtu last week, with prices at Zeebrugge in Belgium at $4/MMBtu and on the Dutch TTF hub at $4.04/MMBtu. Second quarter settlement prices for Jan. 25 show the NBP at roughly $4.01/MMBtu, the Zeebrugge hub at $4.05/MMBtu, the TTF at $4.06/MMBtu and the German NCG hub at $4.18/MMBtu. The forecast decline is despite brief outages at Norway's Oseberg field, longer term problems at UK storage facilities, and caps on production at the giant Groningen field in the Netherlands because of earthquakes (WGI Dec.9' 15).