The price of gas in Europe fell below $1,100 per 1,000 cubic meters for the first time since June 15, according to London’s ICE.
The November futures price at the TTF hub in the Netherlands fell to $1,090.5 per 1,000 cubic meters or 107.355 euro per MWh (based on the current euro/dollar exchange rate, ICE prices are presented in euro per MWh).
Since the start of trading on Tuesday the gas price dropped by almost 16%.
However, the sharp price drop was short-lived, and by 06:30 p.m. Moscow time it returned to the $1,150 area again.
The EU gas reserves are getting close to their limit, the region is experiencing rather mild weather, and the average percentage of wind power in electricity generation has greatly increased, all of which are contributing factors to the price drop.
Besides that, on Tuesday, the European Commission (EC) presented a new package of measures to combat the energy crisis in the European Union. In particular it proposes to introduce dynamic gas pricing on Europe's largest gas exchange (Title Transfer Facility virtual hub). This measure is expected to be temporary until the EC develops a new LNG price benchmark by March 2023.
The European Commission also considers it necessary to make mandatory joint purchases of gas by the EU member states at the level of 15% of the total demand, as well as a reduction in monthly energy consumption by 15%.
