The supply of gas from Russia remains the major theme in the gas market. Russia is using the gas supplies as political leverage. However, its effects are not limited to Europe.
Gas remains historically expensive on the European market. On Wednesday, July 27, the quotation on the TTF rose to €205,22 per MWh. In the days that followed, the price fell slightly, but this was ultimately limited to €190,91 per MWh on Friday, July 29. However, yesterday the price had risen again to €205,17 per MWh. The quotation on the TTF is therefore not much below the record price of early March, when the price peaked at €227,20 per MWh.
The faltering supply of gas from Russia is and remains the main cause of the high gas price. The most important route for gas imports is the Nord Stream 1. Only 33 million cubic meters of gas now enter Europe every day via that pipeline. That's about 20% of the pipeline's capacity. According to Gazprom, no more gas can be transported via this route due to technical problems. Gazprom's cutting of gas supplies coincided with the European Commission's announcement that member states must save 15% on their gas consumption.
Competition
Reducing the gas supply to Europe is seen by more and more parties as a means of political pressure on the EU. This does not only affect European gas customers. In order to reduce the need to import gas from Russia, the EU has actively entered the LNG market in recent months. With the decline in supplies from Russia, prices on the European gas market are rising and European buyers can pay increasingly higher prices for LNG. And Asian buyers of LNG are increasingly concerned about this. Countries such as South Korea and Japan have traditionally been the important destinations for LNG. In order not to run out of gas in the coming winter and to build up a stock, Asian buyers are following the European prices. That gives gas prices additional momentum in the upward direction.