Negative gas prices may occur in Europe, according to top executives at major commodity market operators. The possibility of prices for short-term gas contracts turning negative this summer is being discussed, as reported by Bloomberg based on discussions at the annual E-World energy fair in Essen, Germany. The reason for potential negative prices would be an oversupply of gas not matching sluggish demand.

This scenario, where gas producers pay consumers to take their gas, is becoming more likely as prices have already approached pre-crisis levels. Recently, gas prices on the European exchange fell below $300 per thousand cubic meters for the first time in two years. During the May 26 auction, the cost of June futures on the TTF Hub in the Netherlands decreased by 0.3% to €25.38 per 1 MWh, approximately $286 per thousand cubic meters, considering the current exchange rate.

Peder Bjorland, vice president of gas trading and optimization at Norwegian oil company Equinor, mentioned that in certain regional gas markets in Europe, prices could go negative during hours or days with high renewable energy production. However, he cautioned that negative prices are still a distant possibility and many factors can influence the market.

Dyerd Varga, the CEO of Swiss trading firm MET International, also believes that the price of gas in Europe will fall below €10 per MWh (about $113 per thousand cubic meters).

“In the short term, within a few days, if the gas storage facilities are full, we could see prices below €10,” Varga stated, attributing the reason to a “bottleneck” caused by insufficient storage space.

Earlier we reported that oil prices rose after the statement by Saudi Arabia’s Energy Minister.