Supply concerns drive up European gas prices – Commerzbank

European gas prices have also risen significantly for almost two weeks, with the European FTT benchmark at €40 per MWh, the highest level since early December, notes Commerzbank commodity strategist Barbara Lambrecht.

European gas prices are rising

“The main reason for the price increase in recent days is the fear of a short-term disruption of the remaining Russian pipeline deliveries to the EU via Ukraine.”

“Gas supplies through the Sudzha crossing are considered at risk due to the alleged advance of Ukrainian troops in the Kursk region: according to Bloomberg, 3 to 5 percent of gas supplies still use this route; customers are Austria and Slovakia, which still covers a large part of their needs.”

“Gas is still flowing, though: The Russian exporter reported only slightly reduced deliveries for Thursday, ultimately due to lower demand from customers. The transit agreement with Ukraine expires at the end of the year anyway. According to Bloomberg, there have been discussions about expanding it, but Ukraine has shown no desire to do so.”