Of the raw material and energy markets, the European gas market shows perhaps the largest price fluctuations. Unlike, for example, oil or grain, it is very difficult for Europe to switch to suppliers other than Russia. And that is reflected in the market.
On the day of the Russian invasion (Thursday 24 February), the natural gas quotation on the TTF shot up by more than 50% to €134 per MWh. When it turned out that Russia was still fulfilling its contractual obligations for gas supplies to Europe, the price dropped back below €100 per MWh. The European Union's sanctions against Russia, and now also against Belarus, are increasing uncertainty and volatility in the market. On Wednesday morning, March 2, the price peaked at €194,72 per MWh. That is now slightly lower, at €156,50 per MWh..
Analysts hardly dare to make statements about the course. European sanctions, such as the disconnection of a number of Russian banks from the Swift system, have made an exception for gas payments. Russia and Belarus - in addition to Ukraine, an important transit country - have previously hinted at stopping gas supplies. In addition, the war in Ukraine is entering a new phase with heavy bombardments. There is a real risk that the gas infrastructure will also be damaged and that the transport of gas to Europe will become so difficult.
Filling Storage
An acute crisis has been averted for this winter. The storage is such that - if no extremes arise - there is enough gas for the rest of the season. Parties are much more concerned about how the stock should be built up. Although Europe has been able to supply LNG mainly from the United States at very high prices in recent months (in addition to the disappointing Russian deliveries), LNG cannot replace natural gas on a one-to-one basis.
Large industrial users can convert their installations to LNG without too many problems. For private individuals with a central heating boiler, the situation is more complicated. In addition, LNG production facilities are reaching maximum capacity. According to experts, there is insufficient LNG available to replace all the natural gas that Russia supplies to Europe.