Gas prices in Europe are predicted to drop below zero

the price of natural gas in Europe with supply in the short term could fall to subzero values.

“If market supply remains high as the filling of the storages, we may see negative rates at some point,” he told Reuters one of the traders on the European gas market.

a Zero or negative price would mean that sellers of gas in Europe will be forced to give the gas for free or even pay to have it collected, according to RBC.

the Average price at which exported gas the Russian concern, in March 2020 was $125 per thousand cubic meters, which is 9% less than in February, and 38% lower than in March last year.

“Gazprom” is trying to avoid the impact of falling spot prices by reducing supplies to Europe, however, pipeline gas competes with LNG is already widely, and the key factor here is Qatar and how it will behave. In April, LNG supply to North-Western Europe from Qatar reached a peak, stated earlier Bloomberg.

Recall that, according to the estimates of Interfax, profitable level of sales of gas to Europe for “Gazprom” at the level of $100 per thousand cubic meters: $13 — the cost of production, $14, tax $27 — transportation in Russia, at least $20 — transport to the target markets of Europe — a total of more than $70, and then you have to add customs duty to 30%.

Earlier it was reported that the income of “Gazprom” on gas exports fell in the I quarter of this year, more than half (51.6%) yoy to $6,81 billion, follows from the materials of the Federal customs service (FCS) of Russia.

this specifies the Department, physical export of gas in January—March decreased by 24.2% to 46.6 billion cubic meters.

Recall that in I quarter of current year “Gazprom” for the first time in its history, began to operate at a loss, if you count in Russian accounting standards (RBSU), and the amount of loss amounted to 306 billion rubles, said the “Interfax”.

Issues of concern have become abnormally warm winter and the overcrowding of the European repositories, in which the company is actively pumped gas to improve the statistics for 2019. His role was played by the increase of other manufacturers in the supply of liquefied natural gas (LNG) to the European market. In the aggregate, a dramatic excess of supply over demand led to a record reduction in the cost of fuel indicated

it was Also reported that by 2020, Gazprom has budgeted the sum of $133 per thousand cubic meters with a possible drop to $70 in summer, however, the pandemic coronavirus infection COVID-19 dealt another blow.

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