Wholesale gas prices tumble as Europe prepares to intervene in energy markets
The wholesale price of gas has dropped sharply in a rare respite from recent highs on signs that Europe is preparing to intervene directly in energy markets.
The European Commission said it was working “flat out” on an emergency package, and on a longer-term “structural reform of the electricity market” to combat soaring prices while efforts to fill gas storage facilities appear to be ahead of schedule.
The day-ahead UK wholesale gas price tumbled by more than 20% to 447p per therm on Tuesday, while the month-ahead contract dropped by a quarter, to 473p per therm.
Prices eased from near record highs but are still 12 times higher than at the start of 2021, before the energy crisis began.
It came as the business secretary, Kwasi Kwarteng, announced progress on efforts to reopen the UK’s biggest gas storage facility. The energy group Centrica is working to bring the Rough facility, located under the North Sea off the east Yorkshire coast, back into use.
“After months of work, the UK oil and gas regulator has today granted the required approvals and consents,” Kwarteng said on Tuesday evening, announcing the green light from the North Sea Transition Authority.
European countries are rushing to fill their gas storage facilities before the winter, amid fears that Russia may further reduce gas supplies. European gas storage facilities are now almost 80% full on average, rapidly closing in on an EU target for countries to hit 80% full by 1 November.
The German economy minister Robert Habeck said he expected gas prices to fall soon as Germany, Europe’s largest gas consumer, was making progress on its storage targets and would not have to pay the high asking prices to continue replenishing stocks.
Habeck also reportedly told other
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