On Tuesday, December 21, gas prices in Europe hit their all-time high.
During the auction, the cost of fuel at the TTF hub in the Netherlands rose by 23% - to € 181.47 per MWh, or about $ 2107 per 1,000 cubic meters.
This value has become the highest ever observed, according to data from the London stock exchange ICE.
Since the beginning of 2021, gas prices on the European market have risen more than nine times.
According to experts, the main reason for such dynamics was the acute shortage of fuel in the storage facilities of the EU countries.
“We are seeing a perfect storm situation.
Prices rise under the influence of a whole range of factors.
Stocks of raw materials in the storage facilities of the EU remain less and less, while forecasters are waiting for the onset of a cold winter.
At the same time, problems remain with the supply of liquefied natural gas, since it is more profitable for large producers to export fuel to Asia, and not to Europe, ”explained Artyom Deev, head of the analytical department at AMarkets to RT.
According to the latest data from the Gas Infrastructure Association of Europe (GIE), the storage facilities of the UK and the EU countries are collectively filled by less than 59.6%, although a year ago this figure exceeded 71%.
Germany (56.77%), Hungary (55.57%), Slovakia (51.96%), the Netherlands (41.29%) and Austria (37.08%) have the smallest fuel reserves.
“Nervousness to the market is added by the statements of the European authorities regarding Nord Stream 2.
The rhetoric of politicians leads to the fact that sellers of raw materials on the trading floor take advantage of the situation and speculate in exchange contracts, inflating prices, ”added Deev.
On December 12, German Foreign Minister Annalena Berbock said that Nord Stream 2 does not comply with EU norms and cannot yet be approved.
Later, the head of the Federal Network Agency of Germany, Jochen Hohmann, suggested that the decision on certification of Nord Stream 2 AG as an independent pipeline operator would not be made in the first half of 2022.
“As we can see, certification is being postponed further and further.
Against this background, it can be stated that there is no economic solution to the problem of soaring gas prices in Europe, ”Anton Greenstein, an expert at the Hamilton information and analytical center, emphasized in a conversation with RT.
© Stephan Schulz / Dpa-Zentralbild / Legion-Media
Note that the construction of Nord Stream 2 was completed on September 10, 2021, and in October the first string of the pipeline was already filled with technical gas.
However, in order to start transit, Nord Stream 2 AG must obtain a permit from the German Federal Grid Agency.
The agency checks the project for compliance with the EU Gas Directive.
Previously, it was assumed that the pipeline could be certified by January 8, 2022, but in November the German regulator suspended the procedure.
They promised to resume the certification process after Nord Stream 2 AG creates a subsidiary in Germany.
The company is now establishing a separate structure in Germany, and on December 17, Nord Stream 2 AG announced the start of filling the second string of the pipeline.
Paused transit
An additional impact on the price of gas during the auction on December 21 had the news about the suspension of fuel transit through the Yamal-Europe pipeline.
Sergey Kaufman, an analyst at FG Finam, spoke about this in a conversation with RT.
“The volume of transit supplies through the gas pipeline has been decreasing since Friday, and on the eve of Gazprom did not at all begin to book capacities for pumping fuel on December 21.
The reasons for this decision were not reported.
I suppose that this may be due to the lack of applications against the background of too high prices, "said Kaufman.
In turn, the press secretary of the Russian President Dmitry Peskov stressed that the suspension of gas transit through the Yamal-Europe pipeline is not connected with the beginning of filling the second string of Nord Stream 2.
“This is an absolutely commercial situation.
Specific reasons should be asked in Gazprom.
There is no connection here, ”a Kremlin spokesman said.
Nevertheless, the news of the suspension of transit sparked panic among investors, as a result of which the rise in gas prices accelerated.
Igor Yushkov, a leading analyst at the National Energy Security Fund, shared this opinion in an interview with RT.
“However, this is not a serious problem.
Auctions are held quite often, and the company can always participate in them, ”added Yushkov.
Growing accounts
Against the background of a record rise in the cost of gas, European countries are also faced with a frenzied rise in the price of electricity.
For example, in France and Germany since the beginning of 2021, prices have increased by about nine times - to € 453 and € 417 per MWh, respectively.
This is evidenced by the data of the Nord Pool exchange.
As Anton Grinstein noted, the current state of affairs contributes to the acceleration of inflation in the region.
According to Eurostat, in November, the annual growth rate of consumer prices for goods and services in the euro area accelerated to 4.9%.
The achieved figure was the highest in the last 30 years.
“Of course, the rise in gas prices is not the main pro-inflationary factor, but it aggravates the mistakes of the European monetary authorities.
As a result, we see that the growth rate of retail sales is declining almost non-stop, and this is at zero interest rates, as well as gigantic incentive programs.
The growth rates of industrial production and business activity are falling, especially in the service sector, ”said Greenstein.
According to the specialist, in the current environment, the European Central Bank will have to wind down stimulating programs ahead of time.
This, in turn, risks turning into a slowdown in the eurozone economy, the expert said.