Gas prices are pushing up mainly due to the prospects of colder weather and uncertainty regarding supplies. The price of the key gas futures contract with delivery in the next month at the Title Transfer Facility (TTF) virtual trading hub in the Netherlands rose to as high as 56.1 euros per MWh. It later erased some of the gains and hovered just above 55 euros per MWh. This represents an increase of about four percent compared to Thursday.
On Thursday, the price rose by about 15 percent. “It should be expected that once the cold weather hits, which we have been warned about recently, the price will rise even more,” said Lukáš Kaňok from Kalkulátor.cz in response to Thursday’s increase. “In connection with the weather, it is necessary to expect very unstable prices,” he added.
Concerns about supplies are due to the armed conflict between the Palestinian movement Hamas and Israel, damage to the underwater gas pipeline connecting Finland and Estonia, and the ongoing threat of a strike in Australian plants producing liquefied natural gas (LNG).
Last August, the wholesale gas price for the European market climbed to nearly 350 euros per megaw
How are expectations of colder weather and uncertainty surrounding supplies contributing to the rise in gas prices?
Gas prices are on the rise primarily because of expectations of colder weather and uncertainty surrounding supplies. The price of the main gas futures contract at the TTF virtual trading hub in the Netherlands reached a peak of 56.1 euros per MWh, although it later dropped slightly to just above 55 euros per MWh. This represents a 4% increase compared to Thursday’s prices.
On Thursday, the price had already increased by about 15%. Lukáš Kaňok from Kalkulátor.cz commented on the situation, saying, “As we have been warned about the imminent cold weather, it is expected that the price will rise even further. With the weather conditions, we should anticipate very volatile price fluctuations.”
Concerns about supplies have arisen due to various factors. There is ongoing armed conflict between Hamas and Israel, damage to the underwater gas pipeline connecting Finland and Estonia, and the persistent threat of a strike in Australian LNG plants.
It is worth noting that last August, the wholesale gas price for the European market reached nearly 350 euros per megawatt-hour.
It’s frustrating how external factors like weather and conflicts can affect something as essential as gas prices.