Europe’s natural gas prices rose again on Monday as extra supply from Russia continues to be limited, while colder temperatures point to higher demand later this week.
Natural gas prices at the Dutch TTF hub, the benchmark for European gas, had risen by 5 percent by mid-day on Monday, after yet another day in which gas on the Yamal-Europe pipeline via Belarus to Poland and Germany flows in the reverse direction from Germany to Poland. The Yamal-Europe pipeline has now been sending gas eastwards since December 21, according to data from German network operator Gascade cited by Reuters.
Russian supply via Ukraine was also lower than usual, while Moscow and the West are in a political standoff over Russia’s role in Ukraine and a possible Russian invasion of Ukraine that the United States and its allies fear.
Apart from limited Russian supply, European gas prices reflected on Monday lower wind power output and expectations of colder weather in the UK and northwest Europe later this week.
European gas prices returned to rising this week, after losing around 9 percent on Friday, following the Netherlands’ announcement on Thursday that it might need more gas to be pumped at the Groningen gas field in the north of the country. The Dutch government says that more gas needs to be extracted from the Groningen gas field in 2022 to ensure supply because of long-term export contracts with Germany and a delay in the commissioning of a facility in the Netherlands to treat imported gas for use for Dutch households.
Following a decline in Europe’s benchmark gas prices after Christmas due to the high number of LNG cargoes headed its way, the new year began with prices soaring again as gas deliveries from Russia via Ukraine and Poland continue to be low while another cold snap made its way to Europe.