BAKU, Azerbaijan, July 20. Gas and coal prices in Europe will remain above historical averages, Trend reports with reference to the International Energy Agency (IEA).
The latest IE report reveals that tightness of gas and coal markets was evident in 2021, with prices reaching unprecedented highs in October 2021.
The war Ukraine put even more pressure and increased uncertainty across energy commodity markets. European gas and coal prices surged to all-time highs and displayed strong volatility in the first half of 2022. Asian spot LNG and coal prices followed suit, reflecting the strong interconnection of the regional markets. In the United States, low storage levels, together with elevated weather-driven demand in the first quarter and muted response from suppliers, led to decade-high gas and coal prices. Tight supply-demand fundamentals, accompanied by large uncertainties, are expected to linger well into 2023, for both coal and gas across all key markets.
“Low storage levels and growing uncertainty around Russian supply drove up European hub prices. Gas prices on TTF averaged at USD 31.5/MBtu (USD 107/MWh) in the first half of 2022 – over five times their 2017-2021 average for this period of the year. Thermal coal prices rose to an average of USD 281/t – four times their 2017- 2021 average level. Forward prices as of early July 2022 indicate rising prices for both gas (up 58 percent) and coal (up 20 percent) in the second half of 2022, declining in 2023 by 7 percent (gas) and 18 percent (coal). Notably, even with these declines, they will remain well above historical averages. EU carbon prices almost doubled in the first half of 2022 compared to 2021 levels, averaging at USD 91.5/t CO2,” reads the report.