Once again, gas prices in Europe jumped to new records; Where the price on the European stock exchanges broke records for the fourth consecutive day; Exceeding $3,600 per 1,000 cubic metres.
The price of gas has risen more than 67% since the beginning of trading, while the price of April futures contracts, according to the Dutch TTF index (a measure of gas prices in Europe), reached 3639.1 dollars per 1,000 cubic meters, or 322 euros (349 dollars). ) per megawatt-hour, according to ICE, London.
Gas prices in Europe jump to a record level as sanctions against Russia increase
And natural gas trading in Europe ended at $2,300 on Friday, March 4th, according to the Russian TASS news agency.
Reasons For Price Hike
Natural gas prices continue to rise as the European Union, the United States and some Asian countries continue to impose more sanctions on Russian gas, as a result of Russian military moves on Ukrainian territory; Which brought prices to record highs repeatedly.
The TTF index set a new record for gas prices on Wednesday, March 2 at 185 euros ($205.4) per ton, surpassing the high of 184.95 in December 2021.
And two days before this rise in gas prices, European countries began implementing strict sanctions; On February 28, Britain suspended the entry of Russian ships to its ports, while other countries announced that they were considering imposing a ban on Russian ships in the 27 European Union countries.
Russian Gas In Europe
Russia supplies the European Union with about 40% of its gas needs; Therefore, the measures imposed on Russian gas necessitated a rise in prices, despite Moscow’s assertion more than once that European supplies of Russian gas through Ukrainian territory did not stop.
And a report had previously quoted an analyst at the European Energy Aspects Center, Leon Ezbeki, as saying that the movement of gas prices is not caused by changes in gas balances in the old continent, but because of the potential risks that European sanctions pose to Russian energy exports.
Rising natural gas prices accelerate energy transition to renewables
While the chief adviser at Cornwall Insight, Craig Lowry, said that fears of Russian gas cut off from Europe will lead to many fluctuations in energy prices during the coming period.
“Today’s price action is not based on fundamental changes in European gas balances, as the main driver behind the sharp rise is a possible increase in the risks of European sanctions targeting Russian energy exports,” said Leon Ezbeki, an analyst at the European Center for Energy Aspects.
He explained that despite the ongoing war in Ukraine, natural gas shipments from Russia to Europe through various pipelines remain largely unchanged.
With the potential for a supply disruption from Russia reverberating across the European energy market, volatility in energy prices is likely to continue into the future, says senior adviser at Cornwall Insight, Craig Lowry.
Traders and analysts also believe that with the escalation of war and sanctions, the chances of changing the situation and the occurrence of significant price hikes increase.
Source: XglobalMarkets
