Natural gas in Europe rose by about 8% to 86 euros per megawatt-hour due to growing fears of a possible Russian military invasion of Ukraine, which would further escalate tensions between the West and Moscow and lead to problems with Russian supplies of natural gas to the old continent in the case of possible introduction of stricter sanctions.

At the same time, Asian countries are expected to increase their supplies of liquefied natural gas (LNG) due to lower temperatures in the region, which could limit this type of supply to Europe.

For example, China's large oil and gas company, Sinopec, announced five loads of liquefied natural gas in a tender for 45 cargo deliveries.

All this contributes to today's sharp rise in European gas prices, as the price of futures for blue fuel at the Dutch gas hub TTF increased by about 8% to 85.50 euros per megawatt-hour. Earlier in the day, their price even reached 86.50 euros per MWh - the highest since January 17th.

Chart of the price of gas TTF futures (in EUR per MWh)

Meanwhile, the European Commission has discussed with partners, namely Azerbaijan and the United States, ways to increase natural gas supplies to the bloc.

A decline in wind energy production (from RES) is also expected for Monday, according to Elexon data. However, wind speeds will rise later this week, with temperatures expected to rise after the brief ongoing cold snap, although lower consumption is expected by the end of the week amid still low European gas stocks, analysts from Refinitive said.

By 22 January, European gas storage facilities were 43% full, up from 56% at the same time last year, according to Gas Infrastructure Europe.

All this contributes to today's sharp rise in European gas prices, as the price of futures for blue fuel at the Dutch gas hub TTF increased by about 8% to 85.50 euros per megawatt-hour. Earlier in the day, their price even reached 86.50 euros per MWh - the highest since January 17th.

/BNR

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