New flare-up at the start of the session for the price of gas in Europe. The future TTF, benchmark of the price of methane in the Old Continent, started trading at 291 euros, with a sharp rise (+ 5%) before falling back to 288 euros. Yesterday, TTF gas went up to € 295 per MWh, with important repercussions on electricity prices in Europe. On the latter front, the German 1-year benchmark touched 700 euros per Mwh for the first time, with a consequent carry-over effect on other European prices as well.
Yesterday Gazprom announced that from 31 August to 2 September the Nord Stream 1, the pipe that passes under the Baltic and flows into Germany, will stop “for maintenance”. According to ING analysts, “While EU gas storage continues to rise and is currently 77% full (not far from the EU’s 80% target by 1 November), there are real concerns on the evolution of Russian gas flows with the arrival of winter. Uncertainty means that prices are likely to remain high and volatile ”.
Strongly volatile start of the week also for oil. Brent lost more than 4% intraday in the wake of the risk-off on the markets and the greater optimism on the Iranian nuclear issue. Suddenly the prices have regained the lost ground thanks to the unexpected declarations of the Saudi energy minister according to which OPEC could cut production as the lack of liquidity is distorting the financial (future) market compared to the physical one, not reflecting more the fundamentals. “Such a statement would appear to be aimed at avoiding a downward acceleration in the price of oil,” say experts from MPS Capital Services.