Optimistic gas price forecasts are realistic with current oil prices

By Almir Bečarević

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Current trends in oil barrel prices on the markets give optimism that the price of gas will also trend downwards starting in October. For this claim, it is necessary for oil prices to remain below 100 USD per barrel in the coming month as well. This possible decrease in gas prices will not be significant, so I will not provide an estimate, as it would be a minimal correction that could be nullified by a potential increase in the dollar exchange rate. 

What is more significant is the possible correction of gas prices from January 1, 2023, and this correction should be substantial. Specifically, if oil prices remain at these levels, below 100 USD, by the end of the year, we can expect a decrease in gas prices by 10%-20%. 

As can be seen from this overview, no further increase in natural gas prices is expected, and this will continue until oil prices start rising again above 110 USD per barrel. Many important factors involved in oil price formation have managed to stabilize oil prices in recent weeks at more acceptable levels than those we saw before this stabilization. 

Why am I providing this overview?

Firstly, some commissions are meeting and discussing subsidies in the Sarajevo Canton without realizing that a real decrease in gas prices is possible. Is it that difficult to ask?

Secondly, those who were "not responsible" for the rise in gas prices (the global market, they said) should not now be competing to convince the public that they were "responsible" for the fall in gas prices, because again, it is the global market.

Thirdly, the contract with Gazprom expires on January 1, 2023, and there is a real danger that a new contract, not an annex to the existing one, will be signed, based on stock market gas prices, not the oil formula. Since the stock market price of gas is approximately 2,200 USD, we can forget about the forecast of falling gas prices, and the subsidy commissions can freely start their work from scratch, because their efforts were in vain. 

Finally, I want to reiterate that there are no instant solutions in energy, and the strategy of changing energy sources in households is not a task that can be done overnight. Price is a variable category, as is evident with both oil and gas.