European gas price rises to year-end high
The price of European natural gas has risen to its highest level this year. The benchmark futures contract TTF for delivery next month jumped by more than 5.7 percent to 38.78 euros per megawatt hour (MWh) in Amsterdam.
Market participants pointed to attacks on Russian territory by Ukraine. Recent reports suggest fighting in the Russian region of Kursk, near Sudzha, a key entry point for natural gas that flows through Ukrainian pipelines to Western Europe. Gazprom, the Russian energy giant, currently maintains that gas supplies are normal.
The gas price has been rising since late July, with prices gaining significantly in recent trading days. Another factor driving the price increase is investor fear of a new conflict in the Middle East and its potential impact on gas supplies from the region. Tensions between Iran and Israel are a major concern, with U.S. Secretary of State Antony Blinken recently warning of a escalation.
After the Ukraine war drove gas prices to a record high of over 300 euros per MWh in 2022, prices have remained relatively stable in the 30 to 40 euro range in recent months. There was a brief exception in late February when the gas price fell to around 22 euros.
The escalating conflict between Ukraine and Russia has led some to worry about potential disruptions to natural gas supplies, adding to the uncertainty in the market. The ongoing tensions in the Middle East, particularly between Iran and Israel, have also contributed to investor fear and driven up gas prices due to potential impacts on supply from the region.
