(New York) The price of natural gas moved Friday to extreme levels, brushing the all-time high in Europe, still propelled by the prospect of an interruption in deliveries from Russia, while oil prices rose.
Updated yesterday at 6:06 p.m.
The price of European natural gas soared and reached 342,005 euros per MWh on Friday, barely below its historic session record (345 euros per MWh) recorded in March after the Russian invasion of Ukraine.
Around 4 p.m. GMT (6 p.m. in Paris), the Dutch TTF futures contract, the benchmark for the European natural gas market, was trading at 307 euros per megawatt hour (MWh), down slightly over the session, but up more than 24% on the week.
“The big news today is that Russia has been flaring natural gas rather than exporting it, reported the BBC,” which says it happened near the border with Finland, Kpler’s Matt Smith said.
“Russia chooses to flare gas rather than export it via the Nordstream gas pipeline,” commented the analyst.
Gas prices have been propelled for the past week by upcoming Russian supply suspensions via Nord Stream 1, due to pipeline maintenance, according to an announcement from Russian giant Gazprom.
If Russia decides “to continue to use its supplies as a weapon and to keep the gas pipeline closed after the end of maintenance, the risk of further increases remains,” said Ole Hansen, an analyst at Saxobank.
With soaring gas prices, “Europe is encouraged to use any other fuel rather than gas”, which is driving up the prices of fuel oil, diesel, added Matt Smith.
A situation which should further support “an already very visible increase in demand for fuel-based products, in particular diesel and later this autumn also heating oil, to the detriment of gas”, abounded Ole Hansen.
Oil prices resumed their upward path on Friday, amid potential production cuts by OPEC+ member countries, the possibility of a return to the 2015 Iran nuclear deal and directives from the US Department energy to refiners.
PHOTO PAUL RATJE, AGENCE FRANCE-PRESSE ARCHIVES
They were asked in a letter signed by US Secretary of Energy Jennifer Granholm, obtained by AFP, to “focus on rebuilding their stocks in the United States rather than selling them and increasing exports”.
The request comes as the United States approaches the peak of hurricane season, which often disrupts refining capacity on the Gulf Coast.
The barrel of Brent from the North Sea, the benchmark for crude in Europe, for delivery in October, took 1.66% to 100.99 dollars.
A barrel of West Texas Intermediate (WTI), its American counterpart, for delivery the same month, rose 0.58% to 93.06 dollars.