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Companies could also move their gas trading off energy exchanges, where the EU price cap will apply, and instead conduct private transactions. The EU cap will not initially cover these "over-the-counter" (OTC) trades, although the bloc will review next year if they should be included. The EU price cap applies to EU hubs, but not those outside the bloc, such as Britain's National Balancing Point (NBP) trading hub. Front-month TTF prices met the price level required to trigger the EU cap on about 40 days this year. EU gas demand dropped by 20% in August-November this year, compared with the five-year average for the same period, Eurostat said on Tuesday.

☆ The EU agreed to limit gas prices, but some analysts are skeptical
▼ + stars: | 2022-12-20 | by ( Jenni Reid | ) www.cnbc.com time to read: +6 min

Pipes run along a technical facility for compressing natural gas on the site of astora GmbH's Rehden natural gas storage facility, the largest in Western Europe. He flagged that it could disrupt the European energy market, risk security of supply and have wider financial implications. Analysts told CNBC that these conditions called into question the ability of the mechanism to limit energy price rises. Around 70% of liquefied natural gas (LNG) is tied up in long-term contracts, leaving 30% available on a spot basis. "As it stands, about 20% of Europe's electricity comes from natural gas, 10% comes from coal.

The aim is to shield European households and businesses from the kind of gas price spikes experienced since Russia's invasion of Ukraine. WHY CAP GAS PRICES? Gas prices have eased in recent months as the EU agreed some emergency measures, including obligations to fill gas storage, but they remain high. The EU price cap would not drop below 180 eur/MWh, even if the LNG price fell to far lower levels. The EU price cap is designed to be a temporary fix that would apply for one year.

Prices for LNG — a chilled, liquid form of gas that can be transported via sea tankers — are tightly linked to prices for Europe’s natural gas delivered by pipelines. Gas prices spiked to a record high of around €345 ($367) per megawatt hour in August, after Moscow reduced gas deliveries to the continent. TTF gas futures fell back 5% on Monday to hit €107 ($114) per megawatt hour. Other EU measures have included gas storage requirements and a price cap of $60 a barrel on seaborne Russian oil. Germany, the bloc’s biggest economy and one of its largest importers of natural gas, had been the most notable holdout before Monday’s announcement.

EU energy ministers are wrangling over a proposed price cap on gas. European Union nations are engaged in crunch talks to cap gas prices morning, with energy ministers Monday seeming optimistic about a deal following two months of tough negotiations. Runacher said France would be "comfortable" with a range of "160 to 200 euros [eur/MWh], and we feel that this price [range] converges with that of the presidency." On Monday morning, ministers referred to the measure as a "gas market correction mechanism" rather than a cap. European natural gas prices reached historic levels of around 350 euros per megawatt hour in August, when traders were concerned about the bloc's unity in fighting the energy crisis.

European Union energy ministers agreed to a "dynamic" cap on natural gas prices Monday after two months of intense negotiations. Introducing a limit on gas prices has proved controversial for European officials. When applied, it will set a "dynamic bidding limit" on natural gas futures transactions for 20 working days. The Dutch TTF traded around 109 euros per megawatt hour on Monday. Kremlin spokesman Dmitry Peskov said the measure was an attack on market pricing and "unacceptable," Reuters reported, citing Russia's Interfax news agency.

☆ EU countries make final push for gas price cap deal this year
▼ + stars: | 2022-12-19 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

BRUSSELS, Dec 19 (Reuters) - European Union countries' energy ministers meet in Brussels on Monday to attempt to agree a cap on gas prices - their latest idea to tame Europe's energy crisis but one that countries are still split over. With a few countries' positions still unclear, some EU diplomats said both sides may have enough votes to block a deal. Under the latest proposal, once triggered, the EU gas price cap would prevent trades being done on the front-month to front-year TTF contracts at a price more than 35 eur/MWh above a reference level comprised of liquefied natural gas (LNG) price assessments. The EU price cap would not drop below 188 eur/MWh, even if the LNG price fell to far lower levels. The fate of other EU energy policies also hinges on the gas price cap.

☆ Natural gas sinks after EU energy ministers agree to cap prices as Russia's war in Ukraine throttles markets
▼ + stars: | 2022-12-19 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

European and US natural gas prices fell on Monday after EU energy ministers agreed to a price cap. Dutch TTF natural gas futures, the European benchmark, sank 7% to 106.95 euros per megawatt-hour. And in the US, which has emerged as top gas supplier since Moscow began cutting flows to Europe, natural gas prices plunged 12% to $5.805 per million British thermal units. European energy ministers are also poised for a showdown with Intercontinental Exchange, which is behind the largest market in Amsterdam. ICE threatened last week to move its market outside of the European Union if the plan to cap prices goes forward, according to the Wall Street Journal.

☆ EU considers lower gas price cap in hunt for Monday deal
▼ + stars: | 2022-12-18 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

Its proposal would trigger a cap if prices on the Dutch Title Transfer Facility (TTF) gas hub's front-month contract exceed 188 euros per megawatt hour for three days. They have said the cap needs to be below 200 eur if it is to tackle the high gas prices that have pushed up consumer bills. Once triggered, the cap would prevent trades being done on the front-month to front-year TTF contracts at a price more than 35 eur/MWh above a reference price comprised of existing liquefied natural gas (LNG) price assessments. Under the latest proposal, shared with EU countries on Saturday, the EU price cap would not fall below 188 eur/MWh, even if the LNG reference price fell to far lower levels,But if the LNG reference price increased to higher levels, then the EU gas price cap would move with it, while remaining 35 eur/MWh above the LNG price - a system designed to ensure the bloc can bid above market prices if needed to attract scarce fuel. The scepticism of some countries over the gas price cap has been shared by market participants including the Intercontinental Exchange, which hosts TTF trading in Amsterdam.

☆ EU gas price cap will be self-defeating
▼ + stars: | 2022-12-16 | by ( ) www.reuters.com time to read: +2 min

MILAN, Dec 16 (Reuters Breakingviews) - Setting a ceiling on the price of European gas would do more harm than good. European Union energy ministers will meet on Monday to try and agree on the cap, which backers believe will prevent gas prices from spiralling out of control. Under the latest proposal, the cap may be set at 220 euros per megawatt hour for the most liquid future contracts exchanged at the Dutch Title Transfer Facility, Europe’s gas benchmark. The Intercontinental Exchange, which handles the majority of TTF future contracts, believes the additional cost would be $47 billion. Traders could even opt to buy TTF contracts on the Chicago Mercantile Exchange.

☆ ICE warns it could relocate gas trading out of EU if bloc caps price
▼ + stars: | 2022-12-15 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

BRUSSELS, Dec 15 (Reuters) - The Intercontinental Exchange has warned it will consider relocating its gas trading hub to outside of the European Union, if Brussels agrees a plan to cap gas prices. The European Commission, which drafts EU policies, has termed the gas price cap a "market correction mechanism". "It is the responsibility of ICE as the market operator to consider all options if this mechanism is agreed, up to and including whether an effective market in the Netherlands is still viable," ICE said. The TTF is the most liquid gas futures market in Europe, attracting a wide range of gas suppliers, wholesalers and speculators. The European Commission did not immediately respond to a request for comment on ICE's statement.

☆ Europe's gas market faces risks from EU price cap, Equinor says
▼ + stars: | 2022-12-12 | by ( Nora Buli | ) www.reuters.com time to read: +3 min

SummarySummary Companies Gas market liquidity at risk from price cap plansPrice cap will not hamper Equinor deliveries to EuropeBilateral delivery contracts volume has doubledOSLO, Dec 12 (Reuters) - A European Commission plan for a gas price cap risks reducing liquidity in Europe's gas market, posing a threat to how it functions, head of trading at Norwegian oil company Equinor told Reuters, but its own gas deliveries will not be affected. For Equinor, the biggest concern is what happens to the liquidity in the gas market, Helge Haugane, Equinor's head of gas and power trading, said in an interview. "I think the price cap is the one that we need to pay attention to," Haugane said. These contracts are typically indexed to various gas price indices and cover delivery terms of up to 10 years, he added. Equinor is also open to discuss longer term fixed price contracts, but so far there has been limited interest from buyers, he added.

☆ EU at odds over gas price cap as 12 countries criticise latest proposal
▼ + stars: | 2022-12-10 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

EU countries are holding emergency negotiations on Saturday as they attempt to line up a deal to cap gas prices at a Dec. 13 meeting of their energy ministers - but states remain split over the plan. Twelve of the EU's 27 member states have circulated a paper demanding that the price cap be "significantly" lower than the latest compromise being negotiated by countries. EU countries have wrangled for months over whether to cap gas prices, but have so far failed to bridge the gap between their divergent views. Gas prices in Europe have soared this year after Russia slashed gas deliveries following its invasion of Ukraine, pushing up fuel costs and stoking inflation. That is lower than the 275 eur/MWh limit proposed by the |European Commission, but the 12 countries said it was still not low enough.

☆ European Central Bank warns that an EU gas price cap risks financial stability
▼ + stars: | 2022-12-09 | by ( Silvia Amaro | ) www.cnbc.com time to read: +2 min

The European Central Bank has raised concerns over an idea to impose a cap on gas prices in Europe. The European Central Bank is worried about the potential risks to financial markets from an EU-wide cap on natural gas prices. The bloc has been in intense discussions for several weeks over how to impose a limit on gas prices. The Dutch TTF, Europe's main benchmark for natural gas prices, traded around 135.50 euros per megawatt hour Friday. Supporters of the price cap have argued that the instrument will be monitored regularly and can be stopped if regulators, including the European Central Bank, identify any financial distress.

☆ EU gets another reason for a gas cap U-turn
▼ + stars: | 2022-12-09 | by ( ) www.reuters.com time to read: +2 min

BRUSSELS, Dec 9 (Reuters Breakingviews) - The European Commission’s gas cap has taken some withering friendly fire. The European Central Bank has slammed the proposal for threatening financial stability and putting the central bank in an untenable position, in an opinion published on Thursday. The gas cap, put forward under intense political pressure, has exposed divisions among European Union member states. Instead of crafting a workable compromise, the Commission plan seems to have achieved the impressive feat of being both unusable and a danger to financial stability. Ahead of next week’s European leaders’ summit, the smart move is to scrap it.

☆ ICE warns EU gas price cap could see prices rise
▼ + stars: | 2022-12-06 | by ( Kate Abnett | ) www.reuters.com time to read: +3 min

Companies Intercontinental Exchange Inc FollowBRUSSELS, Dec 6 (Reuters) - An exchanges operator has warned the European Union that its proposal to cap gas prices would make it more likely that prices rise to hit the cap, according to a document seen by Reuters. In a memo sent to the Commission, the Intercontinental Exchange (ICE) - which hosts TTF trading - said that proposal could in fact drive prices higher, despite it being designed to cushion EU countries' economies from gas price spikes. The resulting shortage of sellers in the TTF market would drive up prices, it said. "The EU Commission hears the concerns and arguments expressed by the representatives of the European Gas Exchanges. The safeguards include that the Commission could immediately suspend the price cap if it caused negative consequences, including risks to financial stability or gas flows within Europe.

☆ Netherlands proposes EU gas price cap for state-backed buyers - document
▼ + stars: | 2022-12-05 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

Companies Uniper SE FollowBRUSSELS, Dec 5 (Reuters) - The Netherlands has weighed into the European Union's debate on whether to cap gas prices with an alternative proposal that would cap gas prices but only for government-owned or state-supported buyers. The Netherlands therefore proposed capping gas transactions by those buyers at a level below the cap proposed by the EU, and which would be reviewed each month. State-owned gas buyers in Poland, Italy and Austria could also be affected by the proposed Dutch cap. However, the Dutch cap would not directly intervene in the EU's exchange-traded gas markets, which some pro-cap countries say they want. EU gas prices surged after Russia cut deliveries following its February invasion of Ukraine, but prices peaked in August, coinciding with Russia taking the Nord Stream 1 pipeline offline and a drive among EU countries to fill up storage ahead of winter.

☆ EU countries to consider lower gas price cap - documents
▼ + stars: | 2022-12-02 | by ( Kate Abnett | ) www.reuters.com time to read: +3 min

BRUSSELS, Dec 2 (Reuters) - European Union countries will consider on Friday a proposal for a gas price cap slightly lower than a Brussels proposal that some view as too high, with a handful of countries pushing for an even lower limit, documents seen by Reuters showed. European Union countries start negotiations on Friday evening on the European Commission's proposal for a cap to limit gas price spikes, and are racing to reach a deal by Dec. 13. The Commission last week proposed a gas price cap that would kick in if the front-month Title Transfer Facility (TTF) gas price exceeded 275 euros ($289) per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days. But countries still disagree on whether to cap prices at all, while at least five countries are pushing for an even lower cap. In a document shared with other EU member states this week, Italy, Poland, Greece, Belgium and Slovenia proposed two options: either a far lower fixed price cap of 160 euros/MWh, or a "dynamic price cap" that could fluctuate in response to existing liquefied natural gas price benchmarks.

☆ EU countries unhappy with 275 euro gas cap proposal
▼ + stars: | 2022-11-24 | by ( Gabriela Baczynska | ) www.reuters.com time to read: +4 min

The long-standing disagreements were holding up other policies to alleviate the acute energy crisis, such as the launch of joint EU gas purchases and a quicker permit process for renewables. Polish Climate Minister Anna Moskwa called the 275 euro blueprint put forward by the European Commission "a joke". "It could help us reduce gas prices and therefore reduce electricity prices, which is a major challenge in Europe this winter," he said. Energy minister Miriam Dalli said the strict conditions needed for the mechanism to kick in made it "next to impossible". But the issue of whether and how to cap gas prices has split the bloc.

☆ EU countries spar over 275 euros/MWh gas cap proposal
▼ + stars: | 2022-11-23 | by ( Gabriela Baczynska | ) www.reuters.com time to read: +3 min

[1/2] Gas installation is pictured at the Cavern Underground Gas Storage (CUGS) Kosakowo facility, near Debogorze, Poland April, 30. After months of infighting in the bloc, the executive European Commission proposed the cap ahead of EU energy ministers talks on Thursday on the bloc's latest emergency measures to alleviate a winter energy crunch. There are as many as 15 EU countries demanding a solid cap. That would mark a considerable change in EU policies given the 27 member countries have so far only agreed to voluntary gas consumption cuts. EU countries must approve the Commission's proposal for it to become law yet with the current split in views, hopes are low that energy ministers can work out the specifics this week.

The price cap idea has led to persistent disagreements between the EU's 27 member states. Belgium, Greece, Italy and Poland are among the countries most vocal in calling for a gas price cap to be implemented, while the bloc's largest economy Germany has led the opposition. Historically, the gas price at the TTF hub has been used as a benchmark for LNG deliveries into Europe. PRICE CAP ON RUSSIAN GASThe Commission suggested a Russian gas price cap in September, but dropped the idea after resistance from central and eastern European countries worried Moscow would retaliate by cutting off the gas it still sends to them. Given that fall, some EU diplomats said a price cap would do little to reduce European gas prices, and would function as more of a geopolitical move to cut revenues to Moscow.

☆ European Union executive proposes gas price cap at 275 euros/MWh
▼ + stars: | 2022-11-22 | by ( ) www.cnbc.com time to read: 1 min

European gas prices are expected to drop in the coming months. The European Union executive on Tuesday proposed a gas price cap for the bloc at 275 euros ($282) per megawatt hour for month-ahead derivatives on the Dutch exchange that serve as Europe's benchmark. The cap would be available for one year from Jan. 1, 2023, said EU energy commissioner, Kadri Simson. "We propose to put a ceiling on the TTF (Title Transfer Facility) gas price to protect our people and businesses from extreme price hikes," she said. The idea to cap prices has divided EU countries for many months.

BRUSSELS, Nov 22 (Reuters) - The European Commission proposed introducing a gas price cap for one year from Jan.1, 2023, according to draft legislation seen by Reuters that has so far left the actual ceiling level blank. The idea to cap prices has divided EU countries for many months. The Commission's latest proposal will be debated by energy ministers from the bloc's 27 member countries on Thursday. An EU official said the Commission would propose a price higher than backers of the cap want. Divided as ever, EU countries are unlikely to agree on these crucial details of a cap this week, said the sources.

☆ A European Union may cap natural gas prices at 275 euros to blunt the energy crisis caused by Russia's war on Ukraine
▼ + stars: | 2022-11-22 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The European Union's executive arm said Tuesday it's aiming to limit European natural gas prices at €275 per megawatt hour. If approved, the cap would be automatically triggered if two conditions related to benchmark prices are met. EU members have been debating over proposed measures aimed at shielding customers and businesses from energy price spikes. "Gas prices in the EU have fallen since August thanks to demand reduction, mandatory storage filling, diversification of supplies and other measures proposed by the Commission in recent months. But we have been missing in our toolkit a way to prevent and address episodes of excessively high prices," EU Energy Commissioner Kadri Simson said in the statement.

☆ EU executive to outline gas price 'correction mechanism' on Friday -sources
▼ + stars: | 2022-11-10 | by ( Gabriela Baczynska | ) www.reuters.com time to read: +3 min

BRUSSELS, Nov 10 (Reuters) - The European Commission will propose a gas price "correction mechanism" to the 27 EU states on Friday, a measure aimed at easing price spikes but not the firm cap sought by many countries, according to sources and documents seen by Reuters. The European Union has been in a tug of war over a gas price cap, with a dozen-or-so member countries calling for various versions of such a measure to cut prices amid an acute energy crunch that is driving record-high inflation. But Germany, the bloc's biggest economy, the Netherlands and the EU executive Commission say a cap would risk putting off suppliers and reduce incentives to bring down gas consumption. The Commission told EU countries that a "comprehensive hard" cap on TTF, Europe's main natural gas futures market used as the benchmark price, would all but fail to lower prices while also drawing legal and supply risks, according to an EU diplomat. An EU official said the Commission - at a closed-door meeting with 27 national envoys starting at 0800 GMT on Friday - would outline thinking around a "market correction mechanism" instead, which would amount to "a price corridor" on TTF.

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