MOSCOW, Oct 14 Exchange gas prices in Europe are rising due to the approach of cold weather in Central Europe and very weak winds at the beginning of the week, as well as the resumption of strikes at two liquefied natural gas (LNG) plants in Australia and a halt in Israeli gas exports to Egypt, said BCS World Investments investment strategist Alexander Bakhtin.
Gas prices on the TTF index in Europe accelerated their growth on Tuesday after leading Finnish media reported on the upcoming emergency press conference of the Finnish government on the situation with the leak on the Balticconnector gas pipeline. As a result of trading, prices then increased by 14%, exceeding $540 per thousand cubic meters. On Friday, prices exceeded $600 per thousand cubic meters for the first time since March 10.
“The impulse for rising gas prices in recent days, in our opinion, is associated with a number of reasons, among which we highlight the resumption of the strike at two Australian LNG plants, which account for 7% of global production capacity, the approach of cold weather in Central Europe, very weak winds at the beginning of the week and the cessation of Israeli gas exports to Egypt, which could weaken the country’s ability to export LNG,” Bakhtin said.
As for the accident on the Balticconnector gas pipeline, the impact on the market seems limited; Finland will buy more expensive LNG for some time, the expert added. In his opinion, “the impact of the incident on quotes is local and largely caused by information resonance.”
Gas prices on the European market have increased significantly in the spring of 2021. Then quotes fluctuated in the range of 250–300 dollars per thousand cubic meters, by the end of summer they exceeded 600 dollars, and in the fall – already 1 thousand dollars. In the winter of 2021–2022, prices crossed the threshold of $2,000 per thousand cubic meters, and in early spring, in anticipation of a ban on the import of Russian energy resources, they reached a record high of $3,892. Such consistently high prices have not been seen in the entire history of the operation of gas hubs in Europe — since 1996.
Then prices began to decline. The average settlement price of the nearest futures on the TTF index in September reached $408.5 per thousand cubic meters (+3.4% compared to August), and at the end of the third quarter it was about $380.