Gas Prices in Europe Continue to Rise: The Main Reasons
10 August 14:38
Wholesale gas prices in the Netherlands and the United Kingdom are rising on Monday, August 10: Uncertainty surrounding the agreement to resume shipping through the Strait of Hormuz persists, causing markets to remain on edge, reports "Komersant Ukrainian", citing Reuters.
Front-month gas futures on the Dutch TTF hub rose 5.76% to €58.38 per megawatt-hour. The contract for gas to be delivered next month in the UK rose by 5.51% to 143.44 pence per therm.
Iranian Foreign Minister Abbas Arakchi said on Sunday that negotiations with Oman on an agreement regarding the Strait of Hormuz are in the final stages, but reiterated that the U.S. must fulfill a number of other conditions before traffic can resume through this strategically important waterway.
Average air temperatures in northwestern Europe are forecast to rise, peaking by Friday. Daily-ahead demand for gas for electricity generation is expected to rise by 63 gigawatt-hours to 1,893 gigawatt-hours, as wind power generation in Germany is set to fall below normal levels again, which, however, is expected to be offset by high solar power generation, according to LSEG data.
Gas reserves in northwestern Europe are expected to stand at approximately 277 terawatt-hours today, significantly below the 385 terawatt-hours recorded during the same period a year ago.
Injection into gas storage facilities is ongoing, but by the last week of September, reserves are forecast to reach 324 terawatt-hours—also below the level of 446 terawatt-hours recorded a year ago, according to gas market analysts at LSEG.
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