Page 5 - EurOil Week 47 2022

EurOil COMMENTARY EurOil

The final oil cap price will be determined at a announced disappointing progress with repair
G7 meeting on November 23 after a “technical work on the nuclear power station fleet, which
exercise” is carried out, the US Department of will keep production of power at half the usual
the Treasury said in a statement the same day. levels for the rest of the winter.
"The price cap for Russian oil will be set after Power prices in Italy (€233/MWh), the UK
a technical exercise conducted by the Price Cap (GBP283/MWh) and Germany (€178/MWh)
Coalition," reads the document, published on have all fallen back from September peaks. Spain
November 22 as cited by Tass. No further details (€73/MWh) has the lowest power prices of the
were given. major economies in the EU, but is also almost
Dutch front-month natural gas futures entire non-reliant on Russian gas to fire its gen-
advanced more than 5% to €126/MWh on eration plants.
November 23, their highest level in a month
and extending gains for a fourth session, reports Gas price cap at €275/MWh
Trading Economics. Gas traders say the price of the cap makes little
A day earlier Gazprom warned it would curb difference and is largely a symbolic gesture and
gas travelling through Ukraine from November is unlikely to be triggered.
28, via the last remaining pipeline still bringing During the worst of this year’s price spikes
Russian gas to Western Europe. The transit cut rates briefly breached this level and rose to over
will come at a time when temperatures are set €300/MWh, but only stayed there for around five
to dip below average as the first snows fall in days before falling below the price cap level. The
Ukraine and Russia. proposed gas price cap level is so high that this
However, above-normal temperatures so far mechanism would not have been triggered any
this autumn have allowed gas storage sites to time this year, despite the ongoing energy crisis.
remain near full, creating a buffer for the winter “Even at the peak of the EU gas price crisis in
as storage in the EU tanks remains well ahead August, when prices briefly hit an all-time high
of the five-year average. As of November 20, gas of €342 per MWh, they didn't stay above the €275
reserves in the EU were 95% replete, and the total per MWh for two consecutive weeks. So the cap
storage level in Germany was 100%. would not have been activated,” said Javier Blas,
Electricity prices remain elevated in France at a commodities columnist at Bloomberg in tweet.
€427/MWh after the French power authorities “We now have a cap that doesn't cap.”

EU Natural Gas

Week 47 28•November•2022 www. NEWSBASE .com P5