By Geoffrey Smith
Investing.com — Benchmark prices for natural gas in Europe fell to their lowest in three months on Monday, amid reports of a new plan in Brussels to bring them down ahead of the coming winter.
The front-month Dutch TTF contract, which serves as a benchmark for northwest Europe fell 7.7% by 03:05 ET (07:05 GMT) to 142 euros a megawatt hour, responding to a new plan for a “dynamic price cap” hatched by the EU Commission.
The plan is the latest attempt by the Commission to bridge differences between various member states, who have been unable to agree on a common strategy to keep prices down to sustainable levels in the absence of gas from Russia. Typically, Europe’s largest gas supplier, Russia, has cut shipments to a trickle in a – so far unsuccessful – effort to pressure the EU to drop its support for Ukraine.
According to Bloomberg, a draft of the Commission’s new proposal would put a temporary limit on intraday price movements in the TTF contract, which Commission President Ursula von der Leyen said last month had decoupled from reality. At its peak in March, the TTF had traded as high as 345 EUR/MWh.
Even at today’s levels, which are less than half of the second spike in prices in August, the price of natural gas is up by around 10 times from where it has traded for most of the last decade.