Gas prices are subject to numerous influencing factors that can lead to complex price fluctuations. The most important influencing factors include supply and demand, production costs, weather conditions, inventories and geopolitical factors. Other factors such as currency fluctuations, regulations, technological advances, alternatives to gas and transportation capacity also play a significant role. Here we explain how these elements shape gas prices. Read the latest gas price news from the Table.Briefings editorial team! What influences gas prices? Gas prices are influenced by a variety of factors. Here are the most important ones: These factors often interact with each other and can lead to complex price fluctuations. What is the global gas price forecast? Gas prices in 2024 are expected to be influenced by a combination of supply, demand and geopolitical factors. The United States Energy Information Administration (EIA) forecasts that the Henry Hub price for natural gas in the US will increase slightly on average in 2024, but remain below $3.00 per million British thermal units (MMBtu). This is because demand for natural gas will grow faster than supply, particularly due to the increase in consumption in power generation and the export of liquefied natural gas (LNG) (Techopedia) (CleanTechnica). In Europe, prices for natural gas at the Dutch TTF hub are expected to fall, with ING and ABN-Amro forecasting a decline to around EUR 28-35 per MMBtu. The falling prices are mainly due to sufficient supply and slower economic development. However, global geopolitical tensions, particularly in the Middle East, could lead to price spikes in the short term if there are disruptions in the supply chains. Overall, forecasts suggest that gas prices will remain volatile in 2024, but will generally be lower than in previous years. How will gas prices develop in Germany? Gas prices in Germany in 2024 are expected to be influenced by a combination of factors that could lead to some stabilization. A mild winter has reduced demand for heating, which together with high gas storage levels has helped to calm the markets (euronews). German gas storage facilities are well stocked, which increases security of supply and can cushion price fluctuations. In addition, the German government has introduced measures such as the gas price brake, which relieves the burden on households and smaller companies. These measures are intended to ensure that a basic quota of gas is available at a capped price, while specific regulations apply to industrial consumption (ifo). These state interventions help to reduce the economic burden on consumers. Renewable energy and improved performance of nuclear power plants have also reduced dependence on gas, putting further pressure on prices (euronews). Despite these positive developments, risks remain, particularly from geopolitical tensions or extreme weather conditions, which could lead to short-term price spikes. Overall, gas prices in Germany are expected to remain at a stable level, with government measures and the development of renewable energies playing an important role. Nevertheless, consumers must remain vigilant, as unforeseen events may continue to have an impact on price developments. What is the gas price cap? The gas price cap, also known as the "gas price brake", is a government measure to alleviate the burden of high gas prices on consumers and businesses. This measure was introduced by the German government to cushion the sharp rise in energy prices as a result of the energy crisis and the Ukraine conflict. The gas price cap works as follows: The gas price cap was introduced to provide immediate financial support while incentivizing energy savings. This measure is temporary and is intended to apply until the end of the energy crisis in order to stabilize the market and give consumers planning security. The exact details and duration may vary depending on the development of market prices and political decisions.
Heat pumps: Why German levies on electricity make them less attractive
In Germany, taxes and levies on electricity are three and a half times higher than those on gas. This contributes to the fact that fewer heat pumps are used in Germany than in many other European countries.
By Malte Kreutzfeldt