Gas Prices Hit New Records

Natural gas prices have hit all-time highs in almost every part of the world. The price of natural gas has risen by almost 1,000 percent in Europe (to $580 per 1,000 cubic meters) and by 500 percent in East Asia during the past year. Experts believe that the age of cheap gas has come to an end, according to Izvestia.

According to experts, the main reason for this is the economic recovery that will occur after the 2020 coronavirus outbreak. Because of the harsh winter and current hot summer, gas stocks have been depleted, which has resulted in higher gas prices as well.

President of the Institute of Energy and Finance Marcel Salikhov believes that, in addition to economic and natural factors, there is an environmental component to the economic and natural factors. In fact, the fight against global warming and carbon emissions is beneficial to some hydrocarbon energy sources, such as oil and natural gas. Carbon emission prices in Europe have almost tripled in the past year, making natural gas more competitive than coal but also contributing to price hikes in the process.

Aside from that, there are tactical issues with Gazprom, the Russian energy giant that serves as Europe’s main gas supply. Salikhov said that the company has made no effort to increase supply in recent months, as it has in the past, choosing instead to gain more profits from rising prices.

Increases in the stock market are often followed by precipitous declines. In the current environment, rising prices are having a negative effect on demand. During the months of June and July, Europe’s gas consumption reached its lowest level in five years. 

The demand for liquefied natural gas in Asia, on the other hand, has remained robust. According to Salikhov, it is difficult to predict that prices would remain at such a low level for a long period of time since producers will increase supply. As for demand, there are other energy sources that are getting more competitive as gas prices rise.