The price of European natural gas has risen to its highest level this year. The TTF futures contract for delivery in one month rose more than 5.7 percent to 38.78 euros per megawatt hour (MWh) in Amsterdam.
The market referred to Ukraine’s attacks on Russian territory. According to recent reports, fighting broke out in the Kursk region of Russia. These appear to occur near Sudza, an important entry point for natural gas. This reaches Western Europe through Ukrainian pipelines. As the Bloomberg news agency reports, the Gazprom Group still expects normal gas deliveries.
Concerns about escalation in the Middle East
The price of gas has been rising since the end of July, and prices have risen significantly in some cases in recent trading days. Another reason for the price increase is investors’ fear of a new war in the Middle East and the possible impact on gas deliveries from the region. There is great concern that the conflict between Iran and Israel will increase. Recently, the US Secretary of State, Antony Blinken, gave an urgent warning that the situation would worsen.
After the consequences of the war in Ukraine temporarily drove the price of gas to an all-time high of over 300 euros per MWh in 2022, prices remained relatively stable in the range between 30 and 40 euros for a few months down There was an outlier at the end of February, when the price of gas temporarily fell to around 22 euros.