​The price of gas on the TTF exchange in Amsterdam, where indicative prices are set at the European level, is getting lower and lower, reaching just below the €30/MWh threshold on Tuesday. Although, in theory and in practice, the price of gas should be higher in the middle of winter than the rest of the year due to high demand. According to data analyzed by HotNews.ro, the price of gas reached the level of June 2021, before the effects of the energy crisis were felt.

In Romania’s tiny stock market, prices doubled

While the gas market in Europe is striving for normalcy, the Romanian market is behaving as if we are still experiencing an energy crisis. On the tiny Romanian stock exchange, BRM, several transactions are taking place on the fingers of one hand at €60-66/MWh, more than double what we see on the representative Dutch stock exchange.

In addition, the market is not free, there is no price signal, it is not formed in accordance with demand and supply, it does not take into account trends at the European level, the tariff is limited both at the producers and at the end consumer, perhaps at too high a level. Producers are required to sell at a price of 150 lei/MWh (30 EUR/MWh), which is the purchase price plus transport and distribution tariffs and suppliers’ margin.

For the final household consumer, the price is limited to 0.31 lei/kWh, which means 310 lei/MWh (62 EUR/MWh), and for non-household consumers – 0.37 lei/kWh (370 lei/MW -h or 74 euros/MWh). ), with an annual consumption of no more than 50,000 MW*h.

Given what is happening in the European markets, it is possible that these ceilings are too high and do not allow prices to be shaped according to what is happening in the market.

Warehouses are still full

EU countries still have full gas storage, which means that it will easily survive the winter, however difficult it may be in the other cold months of the year.

At the EU level, warehouses are now 79.14% full. Basically, from mid-November until now, that is, in two months, only 20% of what was laid was consumed. At this rate, the EU could end the cold season with 55-60% full warehouses, exceeding the expectations of the European authorities.

Romania also performs well in terms of gas reserves, which is 75.3%, slightly below the EU average. But, unlike many other countries, Romania can also rely on domestic production if necessary.

Given the fact that there is no emotion in the EU regarding gas supplies, the market is calm and prices tend to fall.

At the beginning of October 2023, they amounted to 37-38 euros/MWh.

For comparison, last year in the same period, quotations were about 70 euros/MWh.

Quotations for the following months are also low, at €29.7/MWh in March, April and May.

Basically, prices are almost 90% below their August 2022 highs of €300/MWh during the Russian-induced energy crisis.

Photo source: Šálek Václav / ČTK / Profimedia