Benchmark European natural gas prices rose on Monday morning as forecasts of low wind speeds and still and cooler weather in the coming days spurred increased demand for gas for power generation across Europe.
The day-ahead gas price at the Dutch TTF hub, the benchmark gas price for Europe, jumped early on Monday by $5.26 (4.90 euro) to $103.54 (96.45 euros) per megawatt-hour (MWh), while the front-month futures contract for May increased by $0.43 (0.40 euro) to $104.60 (97.35 euro) per MWh.
“We expect a slightly tighter gas system on the Continent in the coming days due to considerably higher gas for power demand this week,” analysts at Refinitiv wrote in a daily commentary cited by Reuters.
Bookings from European customers for Russian gas flows via Ukraine increased from Sunday to Monday, Interfax reported, citing Gazprom comments and data from the Gas Transmission System (GTS) Operator of Ukraine.
“Gazprom is supplying Russian gas for transit through the territory of Ukraine in regular mode in accordance with the bookings of European consumers at 68.4 million cubic meters on April 25,” Sergey Kupriyanov, a spokesman for Gazprom, said, as carried by Interfax.
Bookings for April 24 were at 53 million cubic meters, according to the Ukrainian gas system operator.
Russian gas pipeline flows to Germany via Nord Stream 1 remained stable on Monday, while the Yamal pipeline continued to carry gas eastbound from Germany to Poland.
Increased demand for gas in Europe because of lower wind speeds comes as the EU and Russia are in a standoff over Putin’s demand that Russia’s “unfriendly” nations—such as all EU members and the UK, among many others—pay in rubles for Russian gas. With payments for April deliveries due in the coming days and weeks, Europe is preparing for a potential halt of Russian gas supply.
Last week, the European Commission said that companies in the EU may have a way to pay for Russia’s gas in rubles without violating sanctions on Moscow. The companies would need to pay in euros or dollars, which would then be converted into rubles, although the transactions would also have to be accompanied by a statement explaining how the companies consider their contractual obligations to be complete once they submitted the euros or dollars.
By Tsvetana Paraskova for Oilprice.com