Gas price tensions spike as Europe debates market intervention
When the temperature drops, the price of gas rises. In Europe, the discussion about freezing its prices is resurfacing. Such intervention, however, raises significant controversies. Traders, energy exchanges, and financial sector representatives have sent a joint letter to Ursula von der Leyen, warning of "unintended consequences," as reported in "Dziennik Gazeta Prawna."
Natural gas prices in Europe have reached the highest levels in two years. Although they have recently receded slightly from the peak value equivalent to about £50 per megawatt-hour, they still present a challenge for the market.
According to the latest data, the gas storage level in Europe currently stands at 48 percent, which represents the lowest level since 2022.
The situation in individual countries is as follows:
- Germany – 49 percent filled,
- France – 30 percent,
- Italy – 60 percent,
- Austria – 59 percent,
- Spain – 70 percent,
- Hungary – 53 percent,
- Czech Republic – 49 percent.
Coupled with a projected 17 percent increase in raw material consumption this month and approaching cold waves in the northwestern part of the continent, the gas market situation could significantly worsen. Additionally, threats of imposing tariffs by the USA threaten to disrupt global fuel supplies. This is a wake-up call for the EU, prompting the discussion about price limits to return.
Warnings against market intervention in gas
According to the journal, such intervention raises controversy in the EU. Among those concerned are traders, energy exchanges, and financial sector representatives, who on Tuesday sent a joint letter to Ursula von der Leyen, warning of the "unintended consequences" of intervention and accusing Draghi of relying on wrongly interpreted and incomplete data.
As part of the EU's gas supply security strategy, adopted after Russia's invasion of Ukraine, member states must store gas in a way that enables achieving at least 90 percent fill before 1st November each year.
