The European Union is considering extending an emergency cap on natural gas prices that went into effect in February, amid fears that conflict in the Middle East and sabotage of a pipeline in the Baltic Sea could raise prices again this winter, the Financial Times reports, citing News.ro.
The European Commission said there was “no sign of a negative impact” since the measure took effect and that natural gas prices are now almost 90% lower than last year, the article said, citing a presentation to EU diplomats.
EU countries agreed in December to the cap, which runs until the end of this year, after protracted negotiations to lower gas prices, which hit record levels after Russia cut gas supplies to Europe following its invasion of Ukraine.
The cap is triggered if prices exceed 180 euros ($196) per megawatt hour for three days for one-month FTT contracts from the Dutch gas hub.
The PFT price must also be €35/MWh higher than the base price based on existing three-day estimates of liquefied natural gas (LNG) prices to trigger the cap.
FTT derivatives account for more than 90% of natural gas derivatives traded on regulated markets in the European Union.
The “market correction mechanism” was extended from May to derivatives linked to trade in all other EU hubs.
Photo source: Paweł Bożek | Dreamstime.com
Source: Hot News
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