European gas prices hit highest level of ’24

European natural gas prices surged to their highest levels this year, trading near €39 ($42.62) per megawatt-hour, following recent developments in Ukraine. The increase is linked to Russia’s state of emergency imposed in the Kursk region, a key gas transit point, and ongoing fighting after Ukraine’s recent incursion.

Despite the situation, natural gas flows through Ukraine continue, though at some of the lowest levels this year.

The Sudzha station, the final pipeline route to Europe via Ukraine, has a transit rate of 37.3 million cubic metres per day, as reported by Russian exporter Gazprom PJSC. This slight decline is attributed to reduced client requests.

Europe’s gas market has been volatile this summer due to increased demand and competition, with futures up about 40 per cent since April. The existing gas transit agreement with Ukraine expires at the end of the year, but an abrupt halt in flows could significantly impact central European nations reliant on this supply.

As of 9:37 a.m. in Amsterdam, Dutch front-month futures, the European gas benchmark, rose 1.4 per cent to €38.98 per megawatt-hour.

Attribution: Bloomberg