The European gas price fell sharply on Friday after the recent strong price increase. The price drop followed news that Russia has ramped up gas supplies to Europe.
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Europe’s largest gas supplier booked about 30 percent of its pipeline space at the last minute to supply gas from Russia to Germany via Poland. As a result of the replenishment of European stocks, concerns about further gas shortages eased somewhat.
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The price of a megawatt hour of gas on the Dutch futures market fell by more than 15 percent to less than 123 euros on Friday. At the beginning of October, the gas price peaked at more than 160 euros. The prices are also considerably higher than at the beginning of this year.
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However, despite the drop, gas prices are still up nearly 17 percent this week. This is partly because a cold snap is expected in Europe next week and storage levels are still at the lowest level ever for this time of year.
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Tensions between Russia and Ukraine spark unrest
Rising tensions between Russia and Ukraine also caused unrest in the gas market. The United States and its European allies fear that Russia is planning to attack or even invade Ukraine. Moscow has gathered many thousands of soldiers in the border region. The new German government also threatened to block the operation of the Nord Stream 2 pipeline if Russia invades Ukraine.
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Moscow has repeatedly stated that it will be able to supply more gas to Europe if the Nord Stream 2 pipeline is approved for use. The lead has been completed, but the German regulator suspended the German approval process. Brussels has yet to agree. The pipeline is controversial because it is feared that Europe will become too dependent on the Russian gas supply.
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“Whatever the unknown reason for the late booking, it very clearly highlights Europe’s problem of rapidly declining inventories, which is exacerbated by an approaching cold spell and the shutdown of nuclear power plants in France,” said Ole Hansen, head of raw materials strategy at Saxo. Bank. If Russia finally decides to “turn on the tap”, Hansen expects that the gas price will quickly fall back to the level of 80 euros per megawatt hour.
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Gas price further up due to concerns about Russia and Ukraine
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Gas price spikes after Germany threatens Nord Stream 2 . pipeline
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