‘Jump’ for natural gas – Over 177 euros per megawatt hour

Natural gas prices in Europe are on a strong upward trajectory, following Norway’s decision to extend reduced capacity at various facilities that help transport the fuel to Europe.

As Bloomberg notes, natural gas shipments from Norway fell further on Tuesday, both to the Easington terminal in the United Kingdom and to the Zeebrugge terminal in Belgium.

The cuts, caused by an incident at the Sleipner field, are expected to last until Wednesday, according to data from grid operator Gassco. The outage also affected the Kollsnes and Nyhamna factories in Norway.

Lower Norwegian flows combined with the disruption of supply from Russia via the main Nord Stream 1 pipeline due to maintenance work that began yesterday are limiting supply at a time when countries are rushing to fill winter storage and a heatwave boosts demand for electricity to cool homes. The UK, where temperatures are well above seasonally normal levels, has seen higher output from gas-fired power plants than normal for this time of year in recent days.

Meanwhile, Russia has not increased supplies through Ukraine while the Nord Stream 1 pipeline has been shut down, while concerns remain that Gazprom may not reopen the taps after maintenance work on the pipeline ends next week.

Amidst this climate, the Dutch natural gas contract – which is a benchmark for Europe – for September delivery rose almost 6.7% to 177.39 euros per megawatt hour, while the corresponding contract for October delivery rose 6.7% , reached almost 180 euros. The price of the Dutch contract has more than doubled over the past month.

The corresponding UK contract rose 18%.