Another 11% jump for natural gas to 245 euros

LAST UPDATE 15:25

The price of natural gas in Europe, which has surpassed 240 euros, continues its steady upward trend, as extremely high temperatures in the region intensify the demand for electricity while Russia keeps flows to a minimum.

In particular, the natural gas contract for September delivery arrived in Amsterdam (TTF) moving at 244.3 euros the megawatt hour, with a new rally almost 11%with prices hitting consecutive daily highs.

High temperatures and prolonged drought have caused Europe’s river water levels to drop rapidly, making it difficult to transport energy products.

Which will likely prompt utilities to resort to increased use of natural gas at a time when supplies from Russia continue to be sharply reduced.

“The relentless rise in European natural gas continues,” analysts at Deutsche Bank Research said in a note.

“Prices are being boosted by the latest European heat wave, which is causing rivers to dry up and causing fuel transport problems, further exacerbating the continent’s current woes on the energy front,” they point out.

Water levels at a critical point on the Rhine – western Europe’s most important river for transporting fuel and other industrial goods – hit a new low this week, making the crossing unprofitable for many barges.

In addition, Russia’s state-owned Gazprom warned today that gas prices could soar this winter by as much as 60% to 400 euros per megawatt hour, citing Western sanctions.

Oil erased losses

At the same time, oil prices erased the losses recorded in the morning and are trying to move higher, after a strong fall of 3% recorded yesterday in the wake of an unexpected slowdown in economic activity in the world’s second largest economy, China.

In particular, his October contract Brent from losses that had exceeded 1.5% it is now strengthened by 0.7% moves to 95.7 dollars a barrel up $0.63.

Similarly, the American WTI September is now strengthened by 1% with its price set at $90.35 the barrel, while at the low of the day it had fallen to 87.82 dollars.

The market now awaits U.S. inventory data due later in the day, which is expected to show likely declines in oil and gasoline last week, while distillate inventories are expected to have risen.