European gas more expensive after Russian deliveries via Ukraine are halted
On the first trading day of the year, European wholesale gas prices continued to climb. In the Dutch futures market, the benchmark for European gas, natural gas for February delivery, briefly reached nearly 51 euros per megawatt-hour on Thursday morning, the highest level since October 2023.
The spike follows Russia’s cessation of pipeline gas deliveries to Europe via Ukraine, which was announced after Kyiv declined to extend the contract. This supply route represented a small share of Europe’s gas demand, which has increasingly relied on pricier liquefied natural gas (LNG) since the war in Ukraine began.
Despite its limited impact on overall supply, the contract's expiration has heightened market tensions. Analysts are now assessing how the shutdown may affect European gas reserves, particularly in the hardest-hit countries, and whether stockpiles will need replenishment this summer.
Adding to the pressure, freezing temperatures across parts of Europe have increased heating needs, further driving demand for natural gas.
© PHOTO VALERY MOREV/ABACAPRESS.COM
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