The price of gas is still falling, for Putin the energy weapon is ‘checked’

Rates in Amsterdam are lower than on the eve of war, rates will go down

The price of gas is still falling, on the same levels as before the war in Ukraine. At the TTF in Amsterdam, February futures stood at 72.5 euros per MWh, down by 4.999%. A quick comparison with the quotations that marked the more than ten months of invasion of Russia allows us to have the perception of a trend that seems to be consolidated by now. On 23 February 2022, the day before the invasion, it closed at €87.5/MWh and during the session of 7 March it reached a record peak of €345.

The energy weapon, at least that one, now seems to have ‘blurred’ for Vladimir Putin and for his blackmail of Europe, which continues to support Kiev’s resistance, despite the fact that the repercussions of the conflict on the world economy remain substantial. In Moscow’s plans, pressure exerted through gas and oil should have limited military and financial support for Volodymyr Zelensky. In reality, data in hand, in ten months the deterrence of Russian supplies, especially those of gas, has essentially been exhausted. Also due to theagreement on the gas price cap achieved in the EU, later than was necessary and with a more political than technical value given the threshold and the characteristics identified, which in any case had the undeniable effect of pushing prices downwards.

The tariffs that determine the extent of the gas also depend on the gas prices household and business electricity and gas bills. On this front too, the race in recent months has come to a halt. With the forthcoming review by the Energy Authority, Arera, the tariffs relating to December for the regulated market will drop, at least partially offsetting the latest increases in November. And even the free market, in perspective, will have to recalibrate its claims with respect to the proposals for pejorative contractual changes that have rained down on Italians in recent months.

It is the signal that even in the transmission to the real economy the energy crisis is reducing its consequences. Several factors are influencing it. The exceptionally warm weather contributes, which is significantly reducing demand. But the strategy that since the outbreak of the war in Ukraine has united all European countries in the race to limit the effects of dependence on Moscow also contributes. First among all, the development of renewables, with installed power in 2022 exceeding that of 2021 by 42%. Then there are the commercial policies adopted to replace Russian gas, with alternative supplies to LNG, liquid gas, which is now abundant throughout Europe. The rush for storage allows us to face the winter with relative serenity, even if temperatures were to drop and consequently demand were to rise again.

Now the game moves to a different level. After the emergency, which has essentially subsided, and the very short term, we must move on to thinking about a structural and medium-long term strategy, otherwise the result obtained would be quickly nullified. (Of Fabio Insenga)