Wholesale gas prices have surged by 60 percent over the past few weeks – widely regarded as unjustified – under the pretext of falling temperatures and increased demand, despite no supply issues as gas storage facilities around Europe are virtually full.
January derivatives on the Dutch exchange (TTF) exceeded 160 euros per MWh yesterday, reaching as high as 165 euros per MWh, the highest level since October 13, following levels as low as 105 euros per MWh during the first ten days of November.
This surge, supposedly resulting from an increase in demand, strongly suggests speculators and traders are having a field day as gas storage facilities around Europe are about 95 percent full and offer supply security.
Meanwhile, the EU’s 27 member states remain divided over the details of a possible gas price cap and are continuing their negotiations without an agreement in sight.
“In essence, the energy market is once again hostage to speculation. The volume of virtual trading in January derivatives is bought and resold ten, twenty times, or even more, creating unjustified revaluations,” Dimitris Kardomateas, former Director General of Strategy & Development at gas grid operator DESFA, told energypress. “Prices at the US Henry Hub are 22-23 euros per MWh, while, in Europe, they are now at 140-150 euros per MWh,” he added.