One of the determining factors will be the conflict in Ukraine. And, of course, Putin’s role and his relationship with Europe and the USA
Gas price: what forecast for 2023? The commodity will be one of the most watched next year. One of the bullish or bearish factors on gas prices in 2023 will be the conflict in Ukraine. And, of course, Putin’s role and his relationship with Europe and the USA.
The Russian president already shut down Nord Stream in the summer and scarce flows from its pipelines could become zero in 2023. As noted by ING experts, “at the moment, daily flows of Russian gas to the EU are about 80% year-on-year, so if we assume they remain at current levels until 2023, annual gas to Europe could decline by a further 60% to around 23 bcm in 2023. And clearly , there is a very real risk that the remaining flows will be stopped.”
Russian flows will have to be completely replaced, especially for 2023 reserves. But if this fails, prices will rise in the face of a lower supply.
In terms of LNG, as explained by Money.it, for gas prices in 2023 this source – increasingly crucial in energy diversification – could be a boomerang, with greater demand from Europe and Asia and rising costs also due to a not enough offer.
The reserves factor will also be crucial. As clarified by the ING strategists, in fact, without the Russian offer, the rate of filling of gas storage will be much lower than in Europe. Winter 2023/24 will still have to count on weak demand in order to remain in balance. With difficulties in filling reserves and in finding raw material other than Russian, the rise in gas prices will be possible in 2023.
Furthermore, the cap on the price of Russian gas will be the big news. Many suppliers have already warned that much-needed LNG shipments could benefit Asia if prices are higher than the limits set in Europe. The move also risks worsening Europe’s gas supply deficit by boosting consumption, Goldman Sachs Group analysts said in a report.
This means that the price cap could disrupt the gas market and drive up prices in 2023.