The price of gas in Spain is cheaper than in the EU for the first time

El precio del gas es más barato por primera vez en España que en la UE

The organized Spanish market of gas (MIBGAS) is at a “significant” level cheaper” as the EU’s European reference market, the TTF – Title Transfer Service, for its acronym in English – Dutch, due to Spain’s lower dependence on gas supplies from Russia the first time this happens.

According to the National Commission for Markets and Competition (CNMC), over the past year the price gap has converged towards that of the main European markets, with the D+1 product beating the Dutch at an annual average of 1.19 euros per megawatt hour (MWh). TTF. The year was marked by very low demand and low prices due to the pandemic in a situation of economic recovery that boosted demand and gas prices in international markets.

From October, several factors began to put pressure on the international gas markets: the low level of underground storage in Europe; the limitation of Russian gas supply to the quantities agreed in the long-term contract; geopolitical uncertainty due to tensions between Russia and Ukraine and the delay in the certification and commissioning of the NordStream 2 gas pipeline.

In this way, gas prices in Spain reached historical highs in the winter of 2021-2022 (183 euros/MWh on December 21, 2021), due to the uncertainty of Russian supply and the strong competition for spot supplies of LNG at world level.

On average for the year, the price of the D+1 product in MIBGAS was 47 euros/MWh, an increase of 37 euros/MWh compared to the average price of 2020 (10.25 euros/MWh, the lowest in the entire series) , reflecting an increase in the average annual price of over 300%. In the case of Spain, imports of Algerian gas have been stopped since November 1, 2021 due to the Tarifa connection, although the capacity of the Medgaz gas pipeline has been increased by 25% (from 8 to 10 bcm), which was commissioned the first months of 2022. The organized gas market in Spain, operated by the company MIBGAS, celebrated its 6th anniversary in 2021. In 2021, the total volume traded in MIBGAS was 68,793 gigawatt hours (GWh), about 18% of national gas demand, compared to 11% the previous year.

Trading volume increased by 72.9% compared to 2020 trading volume (39,780 GWh), returning to the growth trend that existed before the coronavirus pandemic.

In the European context, the largest growth took place in the Dutch TTF market, which extended its leading position compared to the rest of the European markets. In contrast, trading on the UK NBP continued to decline for the sixth straight year, punished by Brexit. – Eph


Euro rises despite Germany

III Slight improvement. The euro advanced to the $1.0250 level yesterday as market sentiment improved and risk appetite increased despite a sharp drop in business confidence in Germany. The European Central Bank (ECB) has set the reference rate for the euro at 1.0236 dollars. Investors ignored the global economic slowdown and the fall in Germany’s business climate in July to its lowest level since June 2020 as the country’s economy teetered on the brink of recession amid rising energy prices and looming gas shortages. The single currency traded in a trading range between $1.0181 and $1.0254.


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