Regardless of document excessive European Union (EU ) pure gasoline storage ranges and decrease costs, the bloc’s govt arm could prolong an emergency restrict on the price of gasoline that was applied earlier this 12 months to keep away from any potential worth hikes this winter.
The European Fee (EC) is reportedly contemplating an extension as an investigation of a leak on the Balticonnector pipeline continues and provide considerations develop as warfare rages in Israel. The EC wouldn’t affirm information media studies about the potential of an extension or different power measures being thought-about.
“As for all emergency power measures we launched final 12 months, the market correction mechanism expires in February subsequent 12 months,” an EC spokesperson mentioned. “However it’s untimely to take a position on the potential extension of the measure, and the EC continues to watch the state of affairs and their impression, in shut cooperation with the member states.”
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A presentation leaked to the Monetary Instances reportedly mentioned there was “no indication of destructive results” for the reason that gasoline worth cap measure had entered into power and that gasoline costs have been now virtually 90% decrease than final 12 months.
EU power ministers agreed to a gasoline worth cap final December to keep away from the document excessive costs of 2022 that have been induced when Russia halted pipeline deliveries to Europe.
Beneath the rules, the worth cap is activated if the front-month Title Switch Facility (TTF) contract worth exceeds 180 euros/MWh for 3 enterprise days, or roughly $56/MMBtu. TTF would additionally need to be 35 euros/MWh, or about $11/MMBtu, above an LNG reference worth over the identical interval. TTF is at present buying and selling round $16/MMBtu.
In Might, the EC determined to increase its gasoline worth cap coverage till the tip of February 2024 to all buying and selling hubs within the EU. Voluntary rules to cut back gasoline demand by 15% have been additionally prolonged till March 2024.
Though the specter of gasoline shortages has “considerably abated, the evolution of costs stays extremely unsure,” the EU wrote in a 2023 financial outlook.
The EC may advocate the worth cap be prolonged subsequent month, together with different measures resembling EU members sharing gasoline provides.
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