What is happening in the gas markets no longer has any qualification. It’s not that he’s incomprehensible, it’s that he’s already entered into a kind of collective frenzy that is out of the ordinary.
This Tuesday, gas markets continued schizophrenia. The Dutch TTF, the benchmark market in Europe, rose more than 12% to exceed 130 euros / megawatt-hour, the most expensive price in history at the end of the session. It’s only €10/MWh of the intraday price record breaking as well.
This means that the price has doubled in six in the last 12 months.
The same is happening in other markets such as Iberian Mibgas. In this case, the daily rate rose to 129.50 euros / MWh, also a record. Gas negotiated for January is slightly cheaper, and is already trading at €124.95/MWh.
These prices also directly affect the prices of electricity, as the combined cycles, which work well these days due to the lack of wind, make the price in the wholesale market register prices as well. On Wednesday, the price in the Iberian pool rose to €291.73 / MWh.
The rise in gas prices comes amid escalating tensions between Russia and Western countries due to the deployment of troops on the border with Ukraine, which led to the raw material being five days in a row above the hundred euros.
The United States confirmed last week that the Nord Stream 2 gas pipeline, which will carry Russian gas directly to Western Europe via the Baltic Sea, would be at risk if Russia invaded Ukraine, an approach approved by the new German government, which does not already threaten to authorize the use of that infrastructure. If the Kremlin violated the Ukrainian border.
To all this, the gas stored in European infrastructures is declining and winter is not yet here. Today, gas reserves in Europe are less than 62%, which is the lowest figure in the past decade. In terms of countries, Ukraine is staggering, with just 34% of its storage capacity, Austria (39%), the Netherlands (45%), and Germany (58%).
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