How big is the price increase now?
In the Dutch futures market, the price of natural gas for September delivery fluctuated around €270 per megawatt-hour on Monday morning (peaking at around €276 at 08.16 am). This is more than 10 percent more than on Friday, when the European reference closed trade at a new record level (€244.55 per megawatt-hour).
Is there a reason for that?
Gazprom has been pumping only about 20 percent of its maximum gas capacity through Nord Stream for weeks. European policymakers say the reduced deliveries are politically motivated in response to European sanctions against Russia for its invasion of Ukraine and its aid to Kiev.
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Next Wednesday, the Nord Stream 1 pipeline is scheduled for maintenance, which will take the gas pipeline between Russia and Europe out of service for three days. There are concerns that the leadership will be out of action for longer than announced, further jeopardizing European supplies. And that Putin turns off the tap a little more.
Over the weekend, German politicians warned of gas supply difficulties. Therefore, the German government is counting on reducing consumption by 20 percent.
Does weather play a role, too?
yes. This week the weather will be much warmer. Then more energy (gas) is needed to provide cooling. So the demand for gas is increasing. The price is followed.
What do the experts say?
“What’s happening now is basically the result of a nervous speculative market that reacts like crazy at the slightest movement. Every little disturbance has a big impact and causes panic reactions. Now, again, it’s Nord Stream 1 that’s causing the uncertainty. Are you going to reopen it after maintenance? And will we get On less gas from Putin?” says energy expert Luc Demeier of energy broker Enbro.
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When do prices reach a ceiling?
“Who’s to say? I honestly don’t think there is or will be a cap anymore. Prices are at unprecedented levels since December. There are always new reasons for prices to go up. This speculation and panic reactions must end. But anyone should take care of that. Unfortunately, I must leave the answer to you.”
Should we be afraid of winter?
“For the price anyway. However, despite the war and all other doomsday scenarios, gas reserves are currently greater than they were in the same period last year. But when the first reports show that we can expect a harsh winter, fear strikes again. With known consequences,” says Luc Demiere.
According to Prime Minister Alexandre de Croo, the coming months will not only be a great challenge, but “the next five or 10 winters will be difficult”, it seemed not very optimistic.