LONDON – British and Dutch gas prices spiked on Thursday, along with oil, European power and other commodities, after Russian forces launched an invasion of Ukraine.
In the Dutch gas market, the front-month contract was up 39 per cent at 117.15 euros per megawatt hour (MWh) but still below December’s record high of nearly 185 euros/MWh.
The summer 2022 price was up 38 per cent at 114.85 euros/MWh while the winter 2022 contract was up 30 per cent at 114.00 euros/MWh.
In the UK gas market, the March price was up 40 per cent at 283.50 pence per therm and the winter 2022 price had risen 31 per cent to 290.00 p/therm.
Oil prices jumped, with Brent climbing above $105 a barrel for the first time since 2014.
“This is panic buying. An invasion has been widely expected,” one gas trader said.
Russian gas exports via Ukraine have continued as normal and are in line with requests from consumers, Russian energy giant Gazprom said.
Ukrainian energy company Naftogaz said the country’s energy infrastructure has not been the subject of systemic shelling and the “situation is under control”.
Eastbound natural gas flows via the Yamal-Europe pipeline halved on Thursday morning on their way to Poland – the same day that Moscow ordered forces to invade Ukraine.
It was not immediately clear whether the lower flows were related to developments in Ukraine, another major route for Russian gas exports to Europe. Russian state gas company Gazprom declined immediate comment.
Russia exports about 180 billion cubic metres (bcm) of gas a year to Europe and Ukraine.
Ukraine accounts for about 40 bcm (around 20 per cent of total Russian supply) as a transit corridor, said sector strategist Allen Good at financial services company Morningstar.
“Halting supplies via Ukraine for two weeks would impact a bit under 2 bcm, which can easily be handled with slightly higher LNG supply and existing gas storage levels in Europe,” he said.
REUTERS
