The price of European gas continues to decline to 23 euros per megawatt hour, reaching a two-year low due to a continuous downward correction of short-term forecasts after the price has already fallen by 75 percent compared to the peak in August 2022.
At the same time, the possibility of a price crash over the summer cannot be ruled out as traders at E-world announce the potential for negative prices in certain regional gas markets. Indeed, gas storage facilities across the EU are already refilled to a level of 68 percent (74 percent in Germany), which is 17 percentage points higher than usual for this time of year. Such levels are typically not reached until mid-July or early August, meaning it won’t be long before maximum storage levels are achieved. All this even creates ‘concern’ that there is too much gas on the way to Europe that cannot be stored.
Accordingly, the European electricity sector is gaining importance right now as the leading gas consumer can ‘counter’ the excessive supply. The supply of renewable energy, hydro energy, and (French) nuclear energy are currently key determinants of prices in the gas market.
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The price of wheat is back at 220 euros per ton after the outlook for winter wheat crops in the US has improved. According to the US Department of Agriculture, 34 percent of the crops are in good or excellent condition, which is three percentage points higher on a weekly basis and above analysts’ expectations.
