Fitch Ratings has increased its natural gas price assumptions for 2021 and 2022 in Europe due to strong year-to-date prices, recovering demand and supply challenges, Report informs referring to the agency website.
Fitch explains the current growth in spot prices for gas at the European Title Transfer Facility (TTF) in the Netherlands above $600 per 1,000 cubic meters by extreme weather conditions, a stable decrease in the supply of LNG since 2020, and a decrease in reserves in gas storage facilities below the level of 2019–2020.
High competition for liquefied gas with the Asian and American regions won’t allow increasing its supply to Europe in the short term. Also, by the end of 2021, one shouldn’t expect an increase in gas supplies from Russia, since Gazprom has already increased exports to Europe to almost record levels: by 19 percent in January-August.
“We expect some of these challenges to spill over into 2022 and, therefore, have also increased our 2022 price assumptions. Still, the 2022 price assumptions are well below the 2021 levels as we expect weather conditions to normalize and Gazprom to increase its exports slightly,” reads the report.