June 17, 2024

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Gas prices rise after a possible new leak in the offshore pipeline and oil prices rise |  Energy prices

Gas prices rise after a possible new leak in the offshore pipeline and oil prices rise | Energy prices

European gas prices will rise more than 6 percent on Monday, after a possible leak in a gas pipeline in the Baltic Sea. Last week, the price of gas also rose after employees at Australian LNG plants announced they would stop working again.

An unusual loss of pressure occurred in an offshore pipeline between Finland and Estonia on Saturday evening, which may indicate a leak. The reason is not clear. Both countries will investigate what exactly is going on. The pipeline was closed in anticipation.

In the coming days, officials will investigate where the potential leak is located and what is causing it. “If the unusual drop in pressure turns out to be due to a leak that caused damage to the pipeline, the repair could take at least several months, depending on the nature of the damage,” the Finnish gas system operator said in a statement.

Almost winter

Europe is currently more vulnerable to the consequences of gas supply disruptions because winter is approaching. In addition, the sector fears gas transit and delivery accidents, after the explosions that occurred in the important gas pipelines Nord Stream 1 and 2 last year. These explosions also occurred in the Baltic Sea. Since these explosions, very close attention has been paid to European energy infrastructure.

Chevron’s Wheatstone LNG facility on the Pilbara Coast, Western Australia. © via Reuters

More than 40 euros per megawatt hour

On the Netherlands’ leading futures market, natural gas was trading at more than 40 euros per megawatt hour on Monday, more than 6 percent higher than on Friday. The price of gas had already risen at the time, after employees at Australian LNG plants announced they would strike again.

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The price of gas will also rise on Monday in the wake of a rise in oil prices as a result of the escalating conflict between Israel and the Palestinians.

Historical record

Despite the recent increases, European gas prices remain well below last winter’s level, and the historic record of €345 per megawatt-hour in March 2022. Gas is still more expensive than it was in the years leading up to the Russian invasion of Ukraine: in 2020 The price fluctuated around 15 euros per megawatt hour.

Although gas storage facilities are almost full, our region remains vulnerable to potential production outages. Another factor is that it is not possible to accurately predict whether Europe will experience a harsh winter or a very mild winter.


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