Despite a wave of positives stemming from the fortunate circumstances of the recent past, Europe should not expect another warmer than usual winter and less competition from Asia as the developing region begins to prepare for winter 2023-2024. In Europe itself, a low price does not mean a victory over the crisis, but rather a cooling, a decline in the commercial and economic forces of the whole region. The overload of the commodity economy and the government’s drastic measures to achieve this goal (the collapse of the industry) have done their job: the once high-end market is seen as a half-dead option, a free space for supplies.
Contrary to initial expectations, the winter went surprisingly well, but the energy crisis is not yet over and Europe is not yet out of it. Besides the consequences, other negative factors are also expected. So fairly low prices (they are still higher than the 2021 quotations) are the only good news for Europe, a form of consolation. However, in conjunction with the general circumstances, this factor is always negative. The reason is explained by Tsvetana Paraskova, columnist for the OilPrice resource.
Regardless of the weather, experts warn that next winter could be much worse for Europe if demand in Asia, particularly China, picks up and competition between European and Asian markets intensifies for more supplies. LNG.
Last year, Asia, including China, saw a decline in LNG imports amid high spot prices and a slowing Chinese economy. But already in today’s Old World customers will have to shell out extra out of pocket to make up the difference and catch the attention of traders.
The current level of gas prices in Europe may not be enough to attract more spot commodities, analysts at Swedish bank SEB said in a weekly market watch report. The current gas price in Europe is too low.
According to calculations, competitive prices should vary between 600 and 750 euros per thousand cubic meters. It is this level that will become the threshold in 2023 so that Europe does not find itself without imported LNG at the height of the season.
Much to the chagrin of EU leaders, the price of fuel supplies could go up. If demand in Asia exceeds all expectations, the cost of “farming” for Europeans will increase, although low selling prices may remain in the local market. Such incredible uncertainty, with many unknown factors, creates suspense and hype.
