Gas Prices in Europe Reach Six-Month Low: Ukraine Advised to Build Reserves

At the end of last week, futures prices for natural gas in Europe significantly dropped, decreasing by more than 10% to €35.2 per MWh, according to data from the ICE exchange. This decline has caused European prices to fall to their lowest level in the past six months.

This is reported by AgroReview

The main reason for this drop is the introduction of new tariffs by the U.S. president. In response to these changes, China has imposed a 34% tariff on all American goods, including energy resources. This, in turn, may lead to a significant reduction or even a complete halt in the supply of American liquefied natural gas (LNG) to one of the largest gas consumers in the world – China.

Competition for Resources Between Europe and Asia

Traditionally, Europe and Asia are competitors in the global LNG market. The reduction of American LNG purchases by China creates opportunities for European countries to obtain larger volumes of available LNG. This, in turn, may affect the overall state of the natural gas market.

Market experts emphasize that the current situation is favorable for gas imports to Ukraine, which will allow for the necessary reserves to be built for the upcoming winter. A slowdown in global economic development, as a result of the new tariffs, may also lead to a decrease in overall demand for natural gas worldwide.