European gas prices smash historic high

European gas prices smash historic high

Natural gas prices in Europe hit record highs in Tuesday’s trading, exceeding $1,000 per 1,000 cubic meters for the first time in history, data from the Intercontinental Exchange (ICE) shows.

The price of October futures on the Dutch TTF exchange surged to $1,031.30 per 1,000 cubic meters, with the overall increase in gas prices since the beginning of the trading day exceeding 11%. The price of November futures on the TTF has reached almost $1,040 per 1,000 cubic meters.

European gas prices may continue to rise and break new records in the event of a cold winter and a physical shortage of gas on the market, according to international rating agency Fitch.

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“The main test for gas prices and consumers will be in winter – in case of cold weather and physical shortage, prices may soar even higher than now,” Dmitry Marinchenko, the senior director of the group for natural resources and commodities at Fitch, told TASS.

Russian experts had warned that gas prices could surge due to a number of factors, including demand in Asia, the weather in Europe and the coming winter season, as well as the timing of the launch of Russia’s Nord Stream 2 pipeline. Low gas-storage volumes across the continent and unusually high demand for the current season also add to the prospects of record highs on the European gas market.

According to the chairman of Russia’s Gazprom, Alexey Miller, growing demand in Europe and a lag in filling underground storage facilities will continue to push natural gas prices higher.

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Sergey Komlev, the department head at Gazprom Export, said that pipeline gas supplies from Russia to Europe this year are at historic highs, with Gazprom increasing gas production by 18.4% year-on-year.

At the same time, the European gas market in the first half of 2021 faced an outflow of liquefied natural gas (LNG) to the Asia-Pacific and South American markets, with its share in imports dropping from 41.5% to 31%. In absolute terms, LNG supplies to Europe during this period decreased by 10.74 billion cubic meters (15.9%).

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