The spot gas price in Europe has set another record over the past three years following the rise in gas prices in Asia and, in our usual terms - in dollars per thousand cubic meters - has updated the first digit of the three-digit price tag.
The value of the futures contract closest to the spot quotes - the September futures on the TTF gas hub index on ICE Futures exceeded $ 500 per thousand cubic meters ($ 510 per thousand cubic meters, or 40.79 euros per thousand kWh).
At the auction the day before, the spot contract on TTF closed at $ 484 per thousand cubic meters.
The achieved indicator is the highest in the last three and a half years - since the beginning of March 2018. Then the legendary cold front "the Beast from the East" raged in Europe, and the price soared to a thousand dollars per thousand cubic meters.
On the eve of the nearest (September) futures on the Asian spot index Platts JKM rose to $ 539 per thousand cubic meters. The dynamics of Asian quotes a few hours later sets the trend for European trading. The most expensive contract for the coming winter - for February 2022 -, meanwhile, costs $ 594. The JKM Index reflects the spot market value of LNG shipments shipped to Japan, South Korea, China and Taiwan. Prices in Asia consistently exceed the European spot - in June the "Asian premium" to the TTF price amounted to 20%.
As prices rise in Asia, Europe gets less and less LNG supplies. The flow of regasified liquefied natural gas from European terminals to the gas transmission system in July 2021 decreased by 23% compared to July 2020 and by 31% compared to July of the pre-crisis 2019. The drop in supplies compared to the previous month, by June 2021, is also a noticeable 13%. The level of LNG reserves in the reservoirs of the receiving terminals of the EU is also falling - the average level over the last 7 days is already 19% lower than in the first week of the month.
A little over a year ago - in May 2020 - the gas price for TTF dropped to a historic record of 3 euros per thousand kWh, or $ 34 per thousand cubic meters. At the end of August 2020, the price exceeded the level of $ 100 per thousand cubic meters, in December - it went over $ 200. The assault on the $ 300 mark took place in May 2021, at the end of June the price exceeded $ 400 per thousand cubic meters. m.
