European gas and power prices surged on signs Russia won’t deliver the boost in supplies President Vladimir Putin promised. This is reported byBloomberg.
“It’s disappointing as the gas market needs more supplies,” said Niek van Kouteren, a senior trader at Dutch energy company PZEM. “If Russia doesn’t increase flows, we might see prices climbing further.”
European gas prices have more than tripled this year as Russia kept supplies capped just as liquefied natural gas cargoes were being diverted to Asia. Moscow repeatedly has said it can supply more of the fuel to Europe via its controversial Nord Stream 2 link, and it has been pressuring the continent to approve flows through the 1,200-kilometer (746-mile) pipeline.
Benchmark European gas futures rose as much as 9.7% and closed 6.8% higher at 79.074 euros a megawatt-hour. The equivalent U.K. contract gained 6% to 202.90 pence a therm.
German power for the first quarter of next year added as much as 6.9% to 166.50 euros per megawatt-hour, while the contract for December rose as much as 5.8%, also reaching 166.50 euros. Carbon increased 2.1% to 60.63 euros per metric ton.
Europe started the heating season with the lowest inventories in more than a decade. Traders have been awaiting more Russian gas because of mounting concerns that there won’t be enough to meet demand if the winter is bitterly cold.