Traders, analysts, and top executives of utility companies are expected to come down to the German city of Essen this week as the E-World Fair opens its doors. With Europe experiencing a rather mild winter, many expect that among the top topics to be discussed during the conference will be about the power and gas markets.
While parts of the United States and the United Kingdom are experiencing negative temperatures and the polar vortex, a significant part of Europe is experiencing a rather mild and warmer-than-usual winter. This has stood true for the better part of the season, which many have forecasted before was supposed to be one of the reasons that gas and power utility prices will increase. As of late, gas and power companies have scrambled to make the most out of that botched forecast.
The moderate winter season in Europe caused a significant drop in the price of fuels which are used to generate electricity. It has also opened up a new discussion about global warming and related policies in order to counter its effects. Majority of the gas and utility markets opened the year with a rather slow sluggish start. That is a complete reversal compared to the industry's performance throughout 2018.
In a statement Mainova AG head of the front office, Harald Herzig said, "Gas storage facilities are still at levels above the five-year average, and supply is stable with Russia deliveries also at high levels."
Mr. Herzig added that with Europe basking in comfortable supply and fewer demands, prices for gas and power will drop. However, he said that these drops in price will not be significant enough to cause alarm.
Europe is currently in the forefront of developing new and alternative sources of energy. This is part of the region's commitment to combating climate change. As such, Europe is currently on the trend of phasing out the use of coal.
Another factor that may have a significant impact on the price of gas and power in Europe is China's decision to cut down on its imports. The Asian superpower recently decided to reduce its imports of both liquefied natural gas and coal. While not significant enough to call for concern, many analysts have noted that China's decision may have helped drop the prices of oil and gas in Europe, a fact that may not bode well for investors in this particular market.
