Countries rush to fill their storage facilities amid concerns over Russian supplies
European natural gas prices surged to a three-month high on Thursday amid lingering concerns over Russian supplies and EU efforts to fill storage facilities before the start of the heating season.
August futures on the TTF trading hub in the Netherlands jumped by 6.4%, reaching $1,630 per thousand cubic meters or €149.15 ($155.05) per megawatt-hour in household terms, data from London’s Intercontinental Exchange shows. It was the first time the natural gas price exceeded that level since March 10.
On June 14, Russian gas exporter Gazprom slashed supplies to Germany via the Nord Stream pipeline by 60% citing technical issues due to Ukraine-related Western sanctions. Following the decision, German Vice-Chancellor Robert Habek called for a reduction in gas consumption in the country, while several other EU nations announced measures to help them use less gas, including reviving coal power plants.
Meanwhile, Nord Stream is scheduled to undergo its regular annual maintenance from July 11 to July 21, according to operator Nord Stream AG, which will result in a temporary shutdown of the pipeline.
Moreover, markets are concerned about the prospect of a gas price cap that was discussed at the G7 summit earlier this week, which some fear could prompt Russia to cut off the EU’s supply and turn to other markets. Compounding the supply squeeze, many European states may find it difficult to obtain liquefied natural gas (LNG) to replace the Russian fuel due to rising demand in Asia, where demand for LNG is soaring as a result of an ongoing heat wave.
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