After more than a week of consecutive declines, Europe's benchmark natural gas prices rose on Tuesday amid lower orders for Russian gas supply transiting Ukraine.
In morning trade in Amsterdam on Tuesday, the front-month gas futures price at the Dutch TTF hub, the benchmark gas price for Europe, was up by nearly 4 percent, while the front-month gas contract in the United Kingdom had risen by 3.5 percent, per Bloomberg data.
Prices were up as orders for Russian gas transit via Ukraine on Tuesday had dropped to 68 percent of the capacity that Russia's giant Gazprom can send. At the same time, deliveries via the Nord Stream pipeline to Germany were close to capacity.
The first rise in European gas prices in seven days of trading comes as the European Union intensifies its efforts to procure non-Russian gas supply.
Italy, for example, which depends for 40 percent of its gas demand on Russia, signed a deal on Monday with Algeria to receive 40 percent more gas from the African gas exporter via the existing pipeline in the Mediterranean. Italy's Eni will increase the quantities of gas imported through the TransMed / Enrico Mattei pipeline under the long-term gas supply contract in place with Sonatrach starting from the next autumn.
Other deals will follow, Italian Prime Minister Mario Draghi said, noting that the deal with Algeria is a step toward reducing reliance on Russian gas.
Europe is also looking to boost its imports of liquefied natural gas (LNG), and various countries, including major economies dependent on Russian gas such as Italy and Germany, have been in talks with exporters, including the United States and Qatar, for more LNG supply, if possible.
Just yesterday, French supermajor TotalEnergies said it plans to raise the production capacity of the Cameron LNG plant in Louisiana in the United States, as the U.S. is looking to boost LNG shipments to Europe to help it reduce dependence on Russian gas.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More