New concerns are pushing up gas prices in Europe

Spot gas prices in Europe rose again this week amid new concerns over the stability of imported gas deliveries to the continent in late December and January next year, as well as cold weather forecasts.

Gas futures for January deliveries rose nearly 4% to the equivalent of around $ 1,450 per 1,000 cubic meters (120 euros per megawatt hour) at the TTF hub in the Netherlands where the global market is concentrated. Most trading and cash.

Traders have responded to the growing consensus that Europe is unlikely to see additional gas supplies from Russia in the first quarter.

The Kremlin has repeatedly linked the increase to requests by German authorities to provide swift certification for the Nord Stream 2 submarine pipeline, owned and operated by Gazprom, crossing the Baltic Sea from Russia to Germany.

However, speaking to German television station ZDF on Sunday, the country’s new Foreign Minister Annalena Baerbock reiterated recent firm statements that “this pipeline cannot be approved because it does not meet the requirements of European energy legislation and security issues are still relevant today. room”.

Germany’s federal network agency suspended Nord Stream 2 certification for technical reasons earlier this year.

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Expectations that Gazprom and Nord Stream 2 would quickly comply with the agency’s requirements to allow the start of gas supplies to Russia were not met.

In addition, a 14-day weather forecast for northwestern Europe released this week predicts below-average temperatures on the continent, which could lead to increased gas outflows from European underground storage facilities.

Despite these forecasts of higher gas demand in its main markets in Europe, Gazprom did not significantly increase its deliveries to Germany via the onshore Yamal pipeline via Belarus and Poland this week, according to data from the German transport operator Gascade.

Supplies via the existing Nord Stream gas pipeline to Germany even declined slightly compared to December 10 and remained unchanged via Ukraine, according to Gazprom.

Citigroup analysts wrote in a research note that gas prices in Europe are skyrocketing due to “nervousness around demand in the final months of winter,” even though the physical gas market is “less strained than it was 4-6 weeks ago,” according to the note. .

Another area of ​​concern relates to repeated threats by Belarusian President Alexander Lukashenko to stop the transit of Russian gas to Poland and Belarus at any time.

Relations between Lukashenko and the European government hit new lows last week after Poland released new evidence of a Belarusian intelligence officer overseeing and guiding the hijacking of a Ryanair airliner to Minsk in May on a false pretext to seize a prominent critic of Lukashenko in exile.

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