Natural gas prices in Europe inched closer to 300 euro per megawatt-hour as fears deepened about a looming supply crunch during peak demand season.
Bloomberg reported today that benchmark gas futures on the continent hit $288.81 (291 euro) per MWh in morning trade, after closing yesterday at a record high.
The report cited Energy Aspects analyst Leon Izbicki as saying the European price for gas could hit 400 euro per MWh in the gas flow via Nord Stream 1 stop next month. For now, Gazprom has said it would suspend flows for three days beginning August 31 for repairs at the only remaining compressor on the route that is still functioning.
In Europe, there are fears that this might not be the end of it, and governments are preparing for a worst-case scenario with zero Russian gas in the winter at a time when some activists are calling on Europe to outright embargo Russian gas as it did with Russian oil.
Meanwhile, Europe is trying to stock up on as much LNG as it can in anticipation of what increasingly looks like the harshest winter in at least one generation.
Because of the record-breaking prices for gas on the spot market, where European buyers source their emergency supplies, energy prices across the EU and the UK are through the roof, aggravating a cost-of-living crisis that has had some politicians warn about social unrest during the winter.
The industry is also under threat because of factories' higher energy bills, with Bloomberg writing earlier this month that a wave of factory closures might be on the way.
"Energy inflation is way more dramatic here than elsewhere," one manufacturing industry executive told Bloomberg last week. "I fear a gradual de-industrialization of the German economy."
German Chancellor Olaf Scholz is currently on a visit to Canada to try and secure future LNG deliveries, although Canada appears to be reluctant to commit to those in light of its net-zero ambitions.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More