Prices for EUROPE GAS are at their lowest in 6 months due to retaliatory tariffs from China
The Dutch and British gas price plunged on Friday to the lowest level in more than six months, in line with the sharp drops in oil and stock market after China announced retaliatory duties on U.S. products, causing global recession fears.
LSEG data show that the Dutch front-month contract fell 3.62 euros or 9% to 35.86 euros or $11.63/mmBtu at 1158 GMT.
The contract had fallen to 35.25 Euros/MWh earlier, the lowest level since September 23, 2024.
The British front-month contracts was down 8.26 cents at 87.51 cents per therm.
The British day-ahead contracts was down 8.28 cents at 87.50 pence/therm.
The prices were already lower in the morning, but they fell even further after China announced an additional 34% tariff on U.S. products.
Stock markets extended losses from earlier trading.
Oil prices
Were headed for their lowest close in 2021, during the middle of the coronavirus epidemic.
A trader stated that the whole markets were collapsing, and nothing was trading on fundamentals. He added that it was unclear whether gas was included in China's tariffs.
Another trader said that the markets now show "a massive recalibration" of where they see global growth, or even the opposite.
Auxilione, a consultancy, said that major energy-intensive industries could change their future plans and this would impact how much energy they require in the future. This was in response to the first U.S. announcement on global tariffs.
The report added that "Companies had already discussed in public the possibility of shutting down and reducing output as a response to the announcement on tariffs."
Daniel Hynes said that the drop in European gas price likely reflects expectations of a greater supply, due to higher tariffs on Chinese imports, which could divert more LNG to Europe.
He added that "risks of a weaker Chinese demand are also higher".
Analysts at Rabobank wrote in a report that despite the wider storage gap in Europe this year, a lower LNG demand in Asia by 2025 could have significant consequences for Europe.
They added that "Europe's benchmark gas price could fall to the low EUR30s in 2025" due to weak Asian LNG demand. However, they still forecast prices at the low EUR40s for the time being.
The benchmark carbon contract in Europe was down 2.71 euro at 63.35 Euros per metric ton after briefly reaching 62.69 Euros/t, which was its lowest level since last November. (Reporting and editing by Susanna Twidale, Nora Buli)
(source: Reuters)
