Since the highest price of at least 188 euros per megawatt-hour reached on December 21, just over two weeks ago, the price on the Dutch futures market, the leader in European gas prices, has exactly halved.

That’s because more natural gas (liquefied) tankers are sailing to Europe instead of the Far East, energy analyst Gilles van den Bokel explains. Most importantly, it’s not too cold in Europe right now for this time of year, he says. If it is not cold, less gas is used.

Ships rotated

The fact that more ships are heading to Europe is because prices in Europe were very high two weeks ago, much higher than in the Far East. This means that it was more attractive for merchants to have ships sail to Europe rather than, say, Japan or China.

Ships carrying gas in this way come from the United States and West Africa. In one case, merchants brought a ship back through the Panama Canal to mark the course of Europe. This required approximately $400,000 in additional channel costs, but it still seemed to be profitable.

Demand is falling in China as the Chinese New Year approaches, when factory activity traditionally slows. Companies are also allowed to reduce their emissions just before the Olympics.

Drop it on the hot plate

Some of those carriers are arriving now. There are now a total of thirteen tankers en route to Europe instead of Asia. However, this doesn’t help much, according to Van den Beukel.

Those ships could be good for 1 million cubic meters of gas, which is only about 0.2 percent of the total 450 billion cubic meters of gas consumed annually, he said.

Bring the imperfection back

Van den Bokel says that relatively mild weather recently has reduced the gas storage deficit by 10 percent. Good of course, but it’s still lacking compared to the levels you usually see at this time of year. The cold season hasn’t really started yet.

For the price of gas, the weather in the Far East is more important than the weather in Europe, says Van den Bokel. This market is much larger than the market in Europe. Thus, the cold winter there creates a huge demand for gas. This is also reflected in the price.

75-100 EUR

Van den Bockel points out that it is impossible to predict the weather for the rest of the winter (in the northern hemisphere). In any case, he does not believe that the price of gas will continue to decline sharply in recent times. “I expect a price of between 75 and 100 euros per megawatt-hour in Europe this winter,” says Van den Beukel.

This was less than a few weeks ago, but much more than the €20 price tag last year.