However, this does not imply that pricing would always stay the same. According to Dr. Sharples, “the market is balanced, but finely balanced.” “We’re not in a crisis situation, but nor are we oversupplied.”
This implies that there’s a chance that supply interruptions or unexpected spikes in demand might yet result in significant price increases. For instance, the region’s supplies would be depleted by a strong cold snap that occurs just before the conclusion of the European winter, necessitating the import of additional gas during the summer.
LNG supplies this year have already been impacted by tensions in the Red Sea region.
Since there is still an abundance of LNG available, it doesn’t seem like this has had much of an effect on global prices thus far. However, it might become a factor if demand increased and the competition for shipments increased.
Electricity
It is challenging to forecast the price of electricity since it depends on a wide range of elements, such as the method of generating, the kinds of fuels utilised, the level of demand, and the impact of weather on generation.
Depending on your location, the generation mix may consist of solar, geothermal, onshore and offshore wind, tidal, nuclear, hydropower, coal, oil, and natural gas. High-capacity cables can be used to trade electricity across nations.
Demand and the cost of the final units of power required to meet that demand determine the price on the wholesale market, where providers and traders purchase electricity on short notice.
In actuality, this implies that gas is frequently utilised to ‘top up’ the generation already supplied by other power sources, such as nuclear and renewable energy, when demand is high. This establishes a relationship between the price of petrol and electricity, so that as petrol prices rise, so will electricity prices.
This is one of the reasons why, after Russia invaded Ukraine, energy-intensive enterprises in the EU suffered far higher electricity bills than those in the US and China. Prices for both gas and electricity skyrocketed.