Gas, electricity, wood pellets, heating oil: gas prices have bottomed out - are prices now rising again?

Created: 11/17/2022, 10:00 am

By: Matthew Schneider

Who is now entitled to the energy flat rate?

(symbol photo) © Action Pictures/Imago

After falling in October, consumer energy prices may now have bottomed out.

With a view to the winter, experts say: It could get more expensive again.

Munich – Since the record prices at the end of August, wholesale prices for energy sources have only known one direction: down.

With them, consumer prices became cheaper.

But these have remained at the same level for days.

It could be a bottom.

This is the case with consumer prices for natural gas

Wholesale natural gas prices have collapsed by a good 73 percent since the end of August.

They had reached their temporary low on November 11 at a good 98 euros per megawatt hour.

That is still more than four times the pre-crisis level.

The drop in prices also affected the special tariffs: by November 11, the national average tariffs for new customers had fallen continuously to 19.4 cents per kilowatt hour - since then the prices have remained constant.

It could be a bottom: Within the last few days, wholesale prices have increased by a good 25 percent to 124 euros per megawatt hour.

This can hardly be explained seasonally: Forward transactions for the whole of 2023 are currently being contracted for EUR 130 (November 11: EUR 108).

This is supported by an unchanged scarce supply, as Ciaran Roe, chief analyst for LNG markets at the rating agency S&P Global, explains: “We expect the market to be as tight in 2023 as it was in 2022.” Because there are hardly any new LNG supply capacities expected.

Shoppers could only hope that delivery issues in Nigeria, Trinidad, Tobago and Texas will be resolved soon.

The supply could lower the prices with the same demand.

But a large part of the gas price development in Europe is weather-related: "If the weather gets colder than average, the prices can react quickly." So far, however, it doesn't look like it: The weather service expects this winter to be 0.6 degrees warmer than that 30-year mean.

But S&P expert Ciaran Roe sees a lower price limit: "Like 2022, there must be LNG prices in Europe that are competitive with Asia, otherwise deliveries will go to the Far East." Currently, one megawatt hour of LNG in Japan costs 95 euros for January, with the annual peak in 2023 it 113 euros.

The alarm level could soon be declared in the gas emergency plan - with far-reaching consequences for consumers.

Video: Energy price relief - who gets how much?

Electricity prices at a glance

Gas-dependent electricity prices for 2023 have also risen by ten percent to 330 euros per megawatt hour in the last few days.

The average lowest consumer prices have remained at a level of 42.7 cents per kilowatt hour since November 11th.

also read

One-time payments for families, tenants, owners: there is so much money from the state now

Pension: Strong increase in 2023 - table shows how much money there is

How will the situation at the wholesale markets develop?

Tobias Federico, head of the consulting agency Energy Brainpool: “It depends a lot on the weather: everyone is very nervous right now, we can see that in the prices.

But if the winter gets mild – and we still have 30 to 40 percent gas storage tank levels in April – the prices for electricity and gas will fall again.”

The failure of the French nuclear fleet is currently of secondary importance: because a lot of electricity is used for heating in France, a mild winter would also bring relaxation here.”

Notable drop in price of wood pellets

There was a notable decline in wood pellets: a ton currently costs around 520 euros, after an October average of 812 euros.

Sabine Hiendlmeier from the CARMEN research institute: "We will probably no longer see prices of 300 euros, but the enormous swings of over 800 euros will no longer be possible in the following heating period." Because the planned gas price cap also sets a certain limit for speculative prices.

Since pellets consist of 85 percent cutting waste, it would now also depend on how much the construction industry weakens.

Prices for heating oil have also fallen since mid-October

Comparatively good news for heating oil buyers: Since mid-October, prices have fallen by a good 23 percent to 1.31 euros per liter.

This is derived from a crude oil price of just under 94 euros per barrel.

For January, retailers are expecting a similar price level, which will fall to around EUR 84 by December over the course of the coming year.

The situation is absurd: with the gas storage tanks full, the price of gas has fallen sharply.

Gas supplies are waiting off the coast.

An energy expert is harshly critical of European governments.