Lowest Gas Spot Prices Since December 2009

June 3, 2019Joachim Endress

Already March 31, we had pointed to a bearish potential of gas prices. At a price level of around 16 € / MWh, we had forecasted prices down to € 12 / MWh during the second quarter. Last week, the NCG Day-ahead had reached a long time low.

The question now is whether prices could maintain this low level or might return to higher levels. The all-time low at the NCG had been reached in October 2009 at € 7.05 / MWh. At that time, prices on the Gaspool even slipped to € 6.88 / MWh. With regard to long-term contracts and production costs, prices could temporarily remain below € 10 / MWh. 

On the other hand, from our point of view, it should be more likely that prices might recover within the short—term. At least this should mean a short-term recovery to a level around 12 €/MWh: The strong downward movement implies a technical counter-movement in the new week. In order to keep enough LNG in Europe, higher prices are required otherwise, the main LNG might be shipped to Asia. The JKM quoted last around 14 € / MWh, which means from point of view of LNG supply, this should give some bottom and support. In addition, low prices should boost gas-to-power demand and injection demand, which should implicate soon higher prices due to the higher demand.

Gas Forecast: Proven Track Record

Take a look at the track record for the NCG Day-Ahead forcast. Our long-term price direction accuracy has been 68%. Within the last 20 trading days, the average absolute deviation of our DayAhead Forecast was 0.29 €/MWh.

Gas Forecast - Track Record

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