FSUOGM: European gas prices continue climb

Europe could face rolling blackouts and heating outages this year if the worst predictions are to be believed, amid worryingly low levels of storage, supply constraints and escalating tensions at the border of Russia and Ukraine.
The January gas delivery contract at the Dutch TTF hub was up nearly 7% in early trading on December 13 at €113 ($127) per MWh. This latest growth comes after the contract surged by 5% on December 10, reaching €105 per MWh. The contract began last week on December 6 at €89.93 per MWh, but surged to €95.88 on December 7 and €101.5 on December 8, before falling slightly to €100.45 on December 9. 
The latest period of growth is the result of both present market forces and speculation. Prices have been on the rise since mid-November – a month when Russia’s Gazprom was widely expected to ramp up shipments to Europe but instead exported a multi-year monthly low. Russian gas flows were up 15% during December 1-8 versus the November low, but they were still down 17% versus the level in December 2020.
Russia has taken a lot of criticism in recent months for not sending enough gas to Europe, although the continent’s second-biggest supplier Norway was also responsible in part for the latest price surge. Troll, the country’s largest gas field, suffered an unplanned outage on December 8. 
However, the main driving force behind the latest price spike was the looming risk of military action in Ukraine, as well as the retaliatory measures that would likely follow from Washington.
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