Natural gas prices extended gains in European trading as fears returned of a prolonged supply disruption through a major pipeline, putting an already troubled economy at risk.
The Dutch contract, which is the European benchmark, rose to 275.97 euros per megawatt hour, strengthening for the fifth week in a row.
Futures rose 13% after closing at a record high on Friday. The Nord Stream pipeline will stop for three days for maintenance on August 31, again raising concerns that it will not return to service as planned after the work.
Germany also warned that Moscow could cut supplies further, and reiterated its call for energy savings.
“We have a very critical winter ahead of us,” German Economy Minister Robert Habeck told state-run ZDF in Montreal during a visit to Canada with Chancellor Scholz.
“We have to wait for Putin to cut gas further.”
European authorities have repeatedly warned of the possibility of a complete cutoff of Russian gas supplies as the Kremlin retaliates against sanctions imposed over the war in Ukraine.
Germany is looking for alternatives but is unlikely to succeed in replacing all Russian imports. The country is evaluating the need to extend the life of nuclear power plants, a measure that would represent a reversal of the country’s energy policy.
Instead, oil fell in today’s trade, with investors eyeing the prospect of more oil from Iran as the outlook for economic growth dims.
Brent futures were up more than 1%, below $96 a barrel, after rising in the previous three sessions.
US President Biden spoke on Sunday with the leaders of France, Germany and the United Kingdom about the possibility of increasing supply from Iran, following a nuclear deal.
Oil has lost all of its gains since Russia’s invasion of Ukraine, as fears of an economic recession weighed on the oil market.
“The global balance for the rest of the year is not as tight as many expected, with Russian supply high,” said ING Groep’s chief commodities strategist.
“While it may take some months for Iran to return to pre-sanctions production levels in the event of a deal, in the short term, they could still increase exports based on storage,” he added.
Brent for October delivery fell 1.5% to $95.23 a barrel, while WTI for September delivery fell 1.6% to $89.34 a barrel.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
