A market regulation mechanism has started in the EU, part of which is a dynamic gas price ceiling.
In the European Union on Wednesday, February 15, the mechanism for correcting the EU gas market officially began, the principles of which were agreed by the EU Council in December of last year. At the moment, its effect is calculated until February 2024, according to the website of the European Union.
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The market correction will be automatically triggered if two conditions are met simultaneously: if the monthly futures price in the European TTF hub remains above 180 euros MWh for three working days and if this price is 35 euros higher than the indicative price of LNG in international markets.
As long as the mechanism is in place, transactions will not be allowed for the relevant gas futures at a price above the dynamic limit (indicating the price of LNG on international markets and 35 euros).
If the LNG price is below 145 euros, the dynamic limit will be 145 euros and 35 euros, i.e. 180 euros.
It will be valid for at least 20 business days from the date of activation. If the limit is below 180 euros per MWh for three consecutive days, the mechanism will automatically close. This will also happen if there is a shortage of gas in the EU to meet demand.
It was previously reported that Russia cut gas production to 673.8 billion cubic meters. m by the end of 2022, exports – by 25.1%, to 184.4 billion cubic meters. m. The decline in production and exports is associated with the refusal of European countries to buy Russian gas, as well as explosions in gas pipelines Nord Stream-1 And Nord Stream-2.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.