How did the EU’s attempt to set a maximum price for gas affect the markets?
The EU Agency for Cooperation on Energy Regulation (ACER) has published its preliminary report on the effects of the “gas market correction mechanism” to limit natural gas in energy markets and the supply of energy from the EU.
In the report, it was recalled that the regulation of the maximum price of natural gas established a mechanism to protect citizens and the economy against excessively high gas prices, and imposed limits on certain financial derivatives traded on the Union stock exchanges in order to limit gas prices in EU countries.
“NO EFFECT DETECTED”
Noting that the expected price ceiling has not had an impact on the EU gas markets to date, the report states that ACER has not identified any significant positive or negative effects that could be clearly and directly related to the mechanism.
Recalling that the mechanism will come into force at a time when natural gas prices are very low compared to the second half of 2022, it was noted in the report that ACER could not conclude that the market dynamics in the first weeks of 2023 had a direct or indirect effect on the approval of the regulation of the maximum price mechanism.
“WE WILL CONTINUE WATCHING”
In the report, which indicated that the mechanism may have effects on financial and energy markets in the future, it was indicated that ACER and the European Securities and Markets Authority (ESMA) will continue to monitor market developments.
The EU countries agreed in December that a correction mechanism known as the “maximum price” of gas prices in the markets would enter into force on February 15.
The maximum price is when the gas futures contract traded on TTF, the Netherlands-based virtual natural gas trading point with the deepest depth in Europe, exceeds €180 over 3 business days, and the price of the megawatt-hour of liquefied natural gas (LNG) in Europe exceeds world markets by 35 euros in the same period the case will enter into force.
TRADE AT 61.5 EUROS
On the other hand, the price of gas futures contracts traded in TTF increased to 340 euros per megawatt-hour in August, while today it is trading at 61.5 euros. (AA)