European natural gas prices have fallen to a more than one-year low as milder temperatures lead to a drop in demand.
Dutch Title Transfer Facility gas futures, the benchmark European contract, closed at €64.30 ($68.19) per megawatt hour on Wednesday, the lowest level since October 2021.
European gas prices hit a record high of about €343 per megawatt hour in August after Russia reduced gas deliveries to the continent in response to wide-ranging economic sanctions following its invasion of Ukraine.
“Concerns that there may not be enough gas available for this winter to cover demand have started to evaporate,” said Tom Marzec-Manser, head of gas analytics at ICIS.
“But this does not mean we are out of the woods yet. Storages have to be refilled again through the upcoming summer, so they are ready again for next winter.
“Refilling those storage sites is going to be much harder than last year, given there will be noticeably less Russian gas available.”
The EU could fall short by about 27 billion cubic metres (bcm) of gas this year if Russian gas deliveries drop to zero and China’s imports of liquefied natural gas rebound to 2021 levels, the International Energy Agency said in a report last month.
Pan-European demand for natural gas in December 2022 was 11 per cent below the five-year average, ICIS said.
“Residential, commercial and industrial gas-users have all been reducing their gas consumption over winter, given the high price of gas,” the consultancy said.
European countries have signed several LNG import agreements with the US and Gulf countries over the past few months.
In December, a record 12 million tonnes of the fuel was imported into the integrated EU and UK gas grid, ICIS said.
The EU’s gas storage capacity is about 83 per cent full, thanks to rising LNG imports and lower-than-normal demand, the consultancy said.
The EU has approved an emergency cap on gas prices, which, from February 15, would be triggered if benchmark gas prices rose to €180 per megawatt hour for three working days in a row.
The spread between prices on the Dutch Title Transfer Facility hub and global LNG prices also needs to reach €35 over the same period of time for the cap to be implemented.
Once activated, it would remain in force for at least 20 working days.
The cap, about €116 per megawatt hour higher than current gas prices, is unlikely to be triggered, but will protect European consumers from “extreme price spikes” seen earlier this year, Norway-based consultancy Rystad Energy said in a report last month.
In May, the EU launched the REPowerEU plan, which comprises measures to tackle the energy crisis caused by Russia's invasion of Ukraine.
With the help of the programme, the bloc plans to reduce demand for Russian gas by two thirds before the end of the year, with a mobilisation of up to €300 billion in investments.
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
Brief scores:
Toss: Nepal, chose to field
UAE 153-6: Shaiman (59), Usman (30); Regmi 2-23
Nepal 132-7: Jora 53 not out; Zahoor 2-17
Result: UAE won by 21 runs
Series: UAE lead 1-0
The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs: 2018 Maserati Levante S
Price, base / as tested: Dh409,000 / Dh467,000
Engine: 3.0-litre V6
Transmission: Eight-speed automatic
Power: 430hp @ 5,750rpm
Torque: 580Nm @ 4,500rpm
Fuel economy, combined: 10.9L / 100km
MATCH INFO
First Test at Barbados
West Indies won by 381 runs
Second Test at Antigua
West Indies won by 10 wickets
Third Test at St Lucia
February 9-13
Mobile phone packages comparison
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
