Benchmark European natural gas prices rose on Monday morning as forecasts of low wind speeds and calm, cooler weather in the coming days spurred increased demand for gas for power generation across Europe .
The daily gas price at the Dutch hub TTF, the benchmark gas price for Europe, jumped early Monday from $5.26 (4.90 euros) to $103.54 (96.45 euros) per megawatt hour ( MWh), while the first-month futures contract for May rose $0.43 (0.40 euros) to $104.60 (97.35 euros) per MWh.
“We expect a slightly tighter gas system on the continent in the coming days due to significantly higher gas demand for power this week,” Refinitiv analysts wrote in a daily commentary quoted by Reuters.
European customer reservations for Russian gas flows through Ukraine rose from Sunday to Monday, Interfax reported, citing comments from Gazprom and data from Ukraine’s gas transmission system (GTS) operator.
“Gazprom supplies Russian gas for transit through the territory of Ukraine in regular mode in accordance with reservations of European consumers at 68.4 million cubic meters on April 25,” Gazprom spokesman Sergey Kupriyanov said. as reported by Interfax.
Reservations for April 24 amounted to 53 million cubic meters, according to the Ukrainian gas system operator.
Russian pipeline flows to Germany via Nord Stream 1 remained steady on Monday, while the Yamal pipeline continued to transport gas east from Germany to Poland.
The surge in gas demand in Europe due to lower wind speeds comes as the EU and Russia are at an impasse over Putin’s demand that Russia’s “unfriendly” nations – like all EU members and the UK, among others – pay in rubles for Russian gas. With payments for April deliveries due in the days and weeks to come, Europe is bracing for a possible Russian gas supply shutdown.
Last week, the European Commission said EU companies may have a way to pay for Russian gas in rubles without violating sanctions imposed on Moscow. Companies would have to pay in euros or dollars, which would then be converted into roubles, although transactions would also have to be accompanied by a statement explaining how companies consider their contractual obligations fulfilled once they have submitted the euros or the dollars.
By Tsvetana Paraskova for Oilprice.com