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Natural gas prices in Europe soar to two-year highs

Ukraine / Europe
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The main drivers of price growth were the shortage of imported liquefied gas and low temperatures.

Natural gas prices in Europe soar to two-year highs

Spot prices for natural gas at European hubs on January 4 (the first business day of 2021) soared to their highest values ​​in the last two years and for the first time in this period exceeded 20 euros per megawatt per hour (MWh). This is evidenced by trading data, ExPro reports.

The main reasons for the sharp rise in gas prices in Europe are the weather and reduced supplies of liquefied natural gas (LNG). So, in the coming weeks in Europe, a cold snap is predicted, which will lead to an increase in demand for natural gas. This, in turn, could lead to even greater price increases.

LNG supplies to Europe continue to decline due to a significant spread between prices in the Asian market and in Europe. As a result, LNG sellers are redirecting tankers to Asia instead of Europe. One of the problems with LNG is also the congestion of the Panama Canal, in connection with which the tankers did not book the passage, on average they have to wait 13 days.

At the same time, following the European markets, prices for natural gas in Ukraine are also growing. At the beginning of the first day of the new year, gas to Ukraine (January resource) is traded at about 8,000 hryvnia per thousand cubic meters (VAT included), the highest value since February 2019.

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