Natural Gas Price

The most up-to-date question on a liberalized market is linked to the forecasting of gas prices. Anticipating the gas price trend can be achieved by using mathematical and statistical tools if we have a sufficient amount of data established as a result of the interaction of demand and supply.

The gas price in a liberalized market is a unitary outcome of the market value and represents the amount for which a quantity can be exchanged on a given date, between a determined buyer and a determined seller, in a balanced transaction, after appropriate marketing, in which each party acts in an informed manner, prudently and without compulsion.

The liberalization of the gas market implies the elimination of the oligopolistic position of the companies operating on the gas market, eliminating the possibility of influencing the price of gas, but it also requires an adequate information for the buyer. Buyers in Romania have few sources of information on the evolution of the gas market in terms of quantity and price. Lack of information among buyers gives the possibility to sellers to introduce and maintain different prices for similar gas offers.

The important steps made by Romania allow the initiation of analyzes, which allow us to forecast a natural gas price trend for the next period. Transactions in Romania are few, which makes the confidence in trends be still small and the error in forecasts be high. However, publications are needed to launch such trends in order to meet the needs of buyers and develop the gas market.

In this context, the Intelligent Energy Association launched for the first time in Romania the first issue of the Quarterly Bulletin – Natural Gas Price, which aims to present the history of the price of Romanian transactions on the wholesale and retail markets, the trends of these prices established on the basis of transactions, with delivery in the coming months for certain gas sources, gas prices – history and trends at European and global levels.

Analyzing the data from the Natural Gas Price Bulletin, we notice that for Q4 2017, the gas price on the wholesale market in Romania for domestic production shows an increasing trend of approx. 6% compared to the price of gas in the summer months. In Q4, along with the domestic gas sources, we will also have gas quantities from storage and import. Transactions with gas from the storage facilities with delivery in Q4 2017 and the trend of the average import price of gas will bring an increase in the average price of gas delivered on the wholesale market in Q4/2017 with approx. 9% compared to the summer months.

The growth trend of gas prices in the wholesale markets in Q4/2017, compared to the summer gas prices, is also found in other wholesale markets, as follows: CEGH Vienna (approx. 5%) and NYMEX New York (approx. 6%).