Page 4 - EurOil Week 33 2022

EurOil COMMENTARY EurOil

European gas prices reach

fresh peak as EU nears 75%

threshold with gas storage

Europe will pay dearly to reach its target to fill gas storage facilities to three

quarters of capacity by November 1

EUROPE EUROPEAN natural gas prices soared to a new constrained, having slumped to an all-time
height of above $2,700 per 1,000 cubic metres monthly low of 3.6 bcm in July, down 23% from
WHAT: on August 16, as a number of factors coincided the previous low registered in June.
European gas prices have to drive up demand and constrain supply, ratch- Russia has blamed the latest reductions
spiked at above $2,700 eting up pressure on Europe’s leaders in their in flow on operational problems at the Nord
per 1,000 cubic metres. standoff with Moscow. The price spike comes as Stream 1 pipeline, arguing that sanctions have
the EU has nearly filled its gas storage facilities hindered maintenance of the Portovaya com-
WHY: to close to three quarters of capacity, meaning pressor station that handles the pipeline’s gas.
Russian supply cuts, the the bloc has around 75bn cubic metres of gas in But European leaders have accused Moscow of
heatwave and various storage and is just 5% shy of reaching its goal of manufacturing an excuse to cut supplies to the
other factors have having its storage sites 80% full by November 1. continent and put further pressure on its energy
contributed to the crisis. While this target now looks very achievable in system, in an attempt to force concessions in the
practical terms, the latest increase in prices will Russia-Ukraine war, such as the ending of arms
WHAT NEXT: drive up the cost even further. supplies to Kyiv. Russia could ramp up gas sup-
What will happen in The September contract at the Dutch TTF plies via Ukraine to offset constraints at Nord
winter will depend greatly gas hub climbed nearly $2,720 per 1,000 cubic Stream, but has chosen not to, they argue.
on the weather and metres at around 13:00 GMT on August 16. At the heart of the issue is the delayed return
Moscow's actions. Russian gas supply remains significantly of a Siemens turbine used at Portovaya that was

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