In the United Kingdom, the wholesale market price for gas delivered next month fell to 9.25 pence per therm, its lowest level in 21 years, raising hopes of lower heating bills in winter this year.
The gas markets in Asia, Europe and the United States have all fallen after being overwhelmed by a glut of gas due to the collapse in demand.
In the Netherlands, considered the largest gas market in continental Europe, prices fell to € 3.93 (£ 3.52) per megawatt hour Thursday, less than a third of the price in the same period Last year.
The gas market price was down before the Covid-19 pandemic, which could reduce gas demand by 5% this year, according to forecasts from the International Energy Agency.
However, the price of oil climbed above $ 36 (£ 29) a barrel for the first time since March Thursday. Crude Brent is now more than double the price it was last month when it dropped to 21-year lows.
Gas market prices have continued to drop despite canceled gas exports from the United States where shale projects are starting to stop, analysts at the petrochemical market news provider ICIS say.
In March, the United States loaded 72 shipments of gas to be exported to giant liquefied natural gas (LNG) tankers and loaded another 61 in April. As of July, it will hold between 30 and 40 shipments, which could mean cutting about 2.6 million tonnes of LNG from the world market, the equivalent of about 8% of the world’s monthly gas supply.
Ed Cox, LNG manager at ICIS, said the collapse in European prices showed that the US decision to cut gas exports was “not enough to balance the market,” adding that “more supply must be taken offline. “
Gas storage facilities in Europe, which fill up regularly during the summer in preparation for the winter months, are already more than half full after record storage injections until April to get some ahead of cheap gas.
Energy suppliers may be able to pass on record low prices to their customers this winter. But some businesses are likely to face severe financial pressures due to unpaid customer bills, which may limit their ability to pass on savings.