The price of natural gas has risen sharply on the Romanian Commodity Exchange (BRM) by 12% in the last 2 days, say the officials of the Intelligent Energy Association (AEI).
“Apparently this increase is in tandem with the price increase on the European FTT Exchange and is attributed to the Russian-Ukrainian crisis. But the extremely hot weather means that Romania has enough domestic gas to cover consumption. The physical flows of gas imported from Western Europe (connected to the price of European stock exchanges) are zero, so this justification, apparently, doesn’t stand,” says AEI.
However, Romania imports virtual gas – although it does not include gas molecules, it enters “virtually imported” gas bills. At the same time, Romania exports (or re-exports) significant quantities of “invisible” natural gas to Hungary, due to the backhaul on the Csanadpalota import point. Currently, the incoming gases are substantially equal to those leaving Romania through the Csanadpalota point, respectively, although the physical flow is zero, on “paper” gases are imported and exported through this point.
“Physically, the gases cannot enter and leave at the same time, through the same point, so the exported gases do not leave Romania, but the quantities of gas entering Hungary are reduced by the values of the virtual export. Gases imported from Hungary reach a price of about 70 euro/ MWh, and gases exported to Hungary are at a lower level (according to some sources 54 euro/ MWh, other sources speak of 68 euro/ MWh). Thus, we have a first way to increase the price of gas in Romania, we export (re-export) cheaply, we import expensively,” says AEI.
“The second way to increase the price of gas can be the game that has been played for two days on BRM. In the last 2 days on the Romanian Commodity Exchange there is an atypical phenomenon, there are 2-3 sellers who sell and buy large quantities of gas, quantities so large that even if some of the suppliers would like to enter and bid lower prices cannot do it, due to the large quantities offered. Interestingly, when new players appeared and bid so that the price seemed to fall and close at a certain price, another supplier appeared that offered well above the level at which the transaction was to close, thus raising much the average daily trading price,” continues the quoted source.
“The forced increase in the price of freight gas on the Romanian market may be determined by the action of some Romanian suppliers (interested in taking advantage of high purchase prices during the application of the price cap system), the interest of some (external) traders which, in the prospect of actions to limit gas from Russia buy gas from Romania or via Romania, from (foreign) traders which carry out gas swaps in order to reduce the price of gas in their portfolio, other interests that could increase gas prices in Romania , etc.… The Russian-Ukrainian crisis seems to be the perfect smokescreen for certain actions and the justification for the 12% increase in the price of freight gas in the last 2 days in Romania.”
