Gas price in Europe went up due to cold weather – Gazprom predicts new export prices

At the end of last week, the first severe autumn colds came to Europe (with temperatures lower than usual for these days), which sharply turned up the natural gas prices. According to Interfax, the reached quotations level is the highest since the beginning of December 2019.

From the historical minimum of 34 US dollars per a thousand cubic meters, which was recorded on May 21, the natural gas price has already increased 4.4 times. Gas prices are on the rise all over the world: they have gone up to 100 US dollars per a thousand cubic meters at the American Henry Hub. Although prices on the American market are slightly lower than in Europe, the difference in price is not enough to cover the costs of liquefaction and transportation to Europe.

As reported by TASS, against the backdrop of rising prices for natural gas in Europe, Gazprom forecasts an average export price following this year to be 120-130 US dollars per a thousand cubic meters. This was announced by Sergey Komlev, the contract structuring and pricing department head at the Gazprom Export, during an online discussion on the prospects for the oil and gas sector.

“We confirm our forecast that an average price in 2020 will amount to 120-130 US dollars per a thousand cubic meters. Somewhere the price will probably be closer to 130 US dollars”, he said.

At the same time, according to Komlev, the company maintains plans for exporting at least 170 billion cubic meters of gas at the end of the year.

All this news is favorable for natural gas exporters from Central Asia, including Turkmenistan. A number of Russian experts assumed that a decrease in gas prices in Europe due to the warm winter of last year and an excess of LNG in the European market could result in Gazprom to be forced to refuse or reduce fuel purchases in the Central Asian region.