The European benchmark natural gas price surged on Thursday morning to hit a new record-high for a second consecutive day, trading at the equivalent of $360 per barrel oil, as concerns over the disruption of Russian gas supply mount.
The gas price at the Dutch TTF hub, the benchmark gas price for Europe, jumped early on Thursday in Amsterdam to trade at $221 (199.99 euro) per MWh, which was a new all-time high. This beat Wednesday’s record of $215 (194 euro) per megawatt-hour.
The new record from Thursday morning means that natural gas was trading at what was around $360 per barrel of oil equivalent, Javier Blas, energy and commodities columnist at Bloomberg, noted.
“Another fierce price jump struck the European gas market yesterday. On the leading European TTF gas hub, the front month contract has now jumped 60% over the course of a week, as the market tries to digest the consequences of the Nord Stream 2 failure and the possibility of no Russian gas to Europe during the coming years,” analysts at Energi Danmark wrote in a morning note on Thursday, forecasting the uptrend to continue today.
In afternoon trade on Thursday, the TTF gas price dropped from the record in the morning, but prices are still much higher than last week.
“The market is very volatile as traders are anticipating political decisions and disruptions,” a gas trader told Reuters.
The market is increasingly apprehensive about a potential disruption to natural gas supply—be it additional sanctions targeting Russia’s energy, a possible Russian retaliation to sanctions by halting pipeline supply, or a direct hit on a pipeline carrying gas from Russia via Ukraine.
“Not to mention the consequences of a possible further tightening of sanctions, the war is already causing damage to Ukraine gas facilities,” analysts at Engie’s EnergyScan analytical service said on Thursday.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Russian Oil & Gas Giants Lose 95% of Their Market Cap On London Exchange
- Oil Spikes To $112 As Russian Crude Becomes Toxic
- Europe Can Survive Next Winter Without Russian Gas