Falling gas price: it’s lower than when Russia invaded Ukraine

The ceiling has not yet been released, but the effects on the price of gas are already clear. This morning the cost returned to 85 euros per megawatt hour (MWh), below the levels prior to the war in Ukraine: on 24 February 2022, the day of the invasion of Russia, the price had shot up to 127 euros per MWh while between 22 and 23 February the price was between 79 and 88 euros per MWh. A situation in which the effect of Russian threats is not felt. Deputy Prime Minister Alexander Novak announced that Moscow is ready for “a partial reduction in production.”

According to Putin’s loyalist, the “unfriendly actions” by the European Union will result in “the reorientation of our energy resources towards other markets, towards the markets of friendly countries in the Asia-Pacific region, Africa, of Latin America”. In recent days, the president of the Area, Stefano Besseghini, has highlighted that gas tariffs will in any case rise. As far as electricity is concerned «all things considered – he stated – that there won’t be any increases, because the quarter was one with relatively low average prices. For gas, the start of the winter phase will certainly lead to an increase. The formation of the price will take place in 15 days».

According to analysts, there is not only the effect of the price cap on the downward trend in the price of gas. The market is also watching LNG imports with great interest, which have almost reached a record. Forecasts of mild temperatures in the coming weeks also ease fears over storage which is now over 83% filled, above the five-year seasonal norm. With the end of the cold snap “and mild and windy weather forecast for the next fortnight, plus the usual reduction in industrial demand over the Christmas period, there are many bearish factors at play,” says Tom Marzec-Manser , head of gas analysis at Icis in London.