The exchange price of gas in Europe has set a new record — $2,515 per thousand cubic meters. Prices are rising against the background of a reduction in reserves in European UGS to historic lows and the preservation of geopolitical tensions.
Exchange prices for gas in Europe have updated the historical maximum. The price of the April futures on the TTF hub in the Netherlands rose by 32% and by 17:30 Moscow time on March 4 reached €212 per 1 MWh, or $2,515 per thousand cubic meters. m taking into account the current exchange rate, according to ICE exchange data.
The previous record was on March 3 and amounted to €198.56 per 1 MWh, or $2,314 per thousand cubic meters.
Stock prices jumped to record levels due to concerns about supplies, Reuters reported. According to Refinitiv analyst Wayne Bryan, the unstable and uncertain geopolitical situation continues to affect energy prices in Europe.
In addition, this week in Europe there is a decrease in temperature and a sharp decrease in electricity generation due to renewable sources, including wind generation, analysts of BCS World of Investments reported. Another factor of tension in the energy market was the uncertainty with the supply of Russian coal and liquefied natural gas to Europe.
Analysts interviewed by RBC predicted an increase in oil and gas prices due to the situation in Ukraine.
Gas prices are rising amid a reduction in reserves in European underground gas storage facilities (UGS) to historic lows. According to Gazprom, since January 7, the level of reserves in European UGS has moved "to the area of record lows" for a long period of observations. At the end of February, Europe fully used the gas reserves pumped since last year and began using only gas that was pumped into UGS in 2020 and earlier.
The European Union plans to more than double the occupancy of natural gas storage facilities by next winter, the Financial Times reported with reference to the draft document of the European Commission. By September 30, it is planned to fill them by 80%, while now the reserves are filled by 29%. The European Commission proposes to abolish the gas storage fee and allow the governments of the countries to pay for it to companies, and also offers other options, including the introduction of a tax on excess profits of companies until June 30, the newspaper reported.
Plans to increase the storage capacity to 80% look quite real, analysts at VTB Capital Investments said. Last autumn, at the peak, the EU storage capacity reached 77%, at the peak of autumn 2020 — 94%. However, to achieve this goal, the EU will still have to buy gas from Gazprom under long-term contracts, as well as intensify purchases of liquefied natural gas from the United States and Qatar, experts add. All this will mean maintaining high gas prices in Europe for at least the next few months, analysts concluded.
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