Gas prices in Europe are as high as $ 2,000 per 1,000 cubic meters

Spot gas prices in Europe on the morning of December 20 briefly exceeded the mark of $ 1766 per 1,000 cubic meters. m. We are talking about January futures quotes on the Dutch hub TTF. Compared to Friday, the increase was about $ 140 per 1,000 cubic meters. m, according to the ICE exchange. Later, the trading price fell slightly and fluctuated around $ 1,700 per 1,000 cubic meters during the day. m.

Another increase in spot prices took place against the background of news about the low volume of reservations of transit capacity “Gazprom”. The day before, the Russian supplier had booked a minimum of a month’s pumping for the Yamal-Europe gas pipeline, buying only 3.8 million cubic meters in Poland. m of put up for auction 891 million cubic meters. m, reported “Interfax” with reference to the booking platform GSA Platform. In addition, in January next year, the company booked only 19.26 million cubic meters for pumping through Poland. m of gas per day from the proposed 8.91 million cubic meters. m. “Gazprom” also did not buy additional transit capacity of Ukraine.

Gazprom said that supplies to Yamal-Europe are carried out in accordance with consumer requests, the company is fully fulfilling its obligations.

Abnormally high gas prices in Europe have been maintained since the beginning of autumn. The peak of their growth came in early October, when spot quotes approached the mark of $ 2,000 per 1,000 cubic meters. Later, prices fell slightly after Russian President Vladimir Putin instructed Gazprom in late October to begin filling underground gas storage facilities (UGS) in Europe. Last week, prices began to rise again after a series of statements by German officials who created a negative information background.

For example, on December 16, the head of the Federal Network Agency of Germany Jochen Homann said that the issue of certification of Nord Stream-2 will not be resolved in the first half of 2022. Against the background of this statement than $ 120. Nord Stream 2 AG then announced the start of the procedure for filling the second thread with gas to maintain the required volume and pressure level in the pipe. The filling of the first line of the gas pipeline was started in mid-October.

A key factor in the volatility of gas prices in Europe is the record low volume of reserves in underground gas storage facilities (UGS), said Director of Research Vygon Consulting Maria Belova. All other reasons only exacerbate the existing shortage of stocks, and further heat up the market, the expert said.

Now the market is under additional pressure to stop for technical reasons two nuclear reactors at the Siva nuclear power plant in France, which led to a reduction in electricity production by 10%, the expert added.

According to Gas Infrastructure Europe (GIE), on December 18 (latest data) Europe’s storage facilities were 60% full (64.9 billion cubic meters). At the same time a year earlier in the underground storage was pumped 863 billion cubic meters. m.

According to Belova, volatility may persist until the end of the heating season, and this year spot prices may exceed $ 2,000 per 1,000 cubic meters. m. She also added that if the decision on “Nord Stream – 2” will not be made in the first half of 2022, then even after the heating season, this factor will maintain prices at more than $ 1,000 per 1,000 cubic meters. . m.

According to Dmitry Marinchenko, senior director of Fitch Ratings’ natural resources group, gas prices in Europe will soon depend largely on Gazprom’s actions and rhetoric, as well as on weather conditions. Since both of these factors are difficult to predict, strong market volatility will persist, the analyst believes.

“While the theory that before the launch of Nord Stream 2 Gazprom will restrain supplies to Europe, it seems prosperous, it scares market participants, as well as the prospect of postponing the launch of the pipeline,” said the expert. He, like Belova, believes that the period of ultra-high spot gas prices will last at least until the end of the heating season, and possibly longer.

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