Wladimir Putin intervenes personally to calm the record tensions on gas prices. After that in the morning the EU gas prices had reached record levels with leaps of the order of 60% in two days, the Russian president said his country is ready to supply more natural gas to cope with the growing energy crisis. Moscow will increase gas supplies to Europe, including those passing through Ukrainian territory, in response to the shortage of supply.
Russia is the only country that can tangibly help the EU where the gas shortage is greatest. However, the Nord Stream 2 pipeline just completed, which Gazprom would use for these additional flows, is still awaiting certification from German regulators before it can send gas.
Record fluctuations in the EU gas price
Putin’s intervention that allowed the price of gas to retrace quickly and now both the futures on Dutch gas TTF, the most liquid European hub, and the futures on natural gas Natural gas listed in New York are traveling down.
The Dutch TTF gas futures maturing in November shot up 40% this morning, hitting a new record of € 162.125 per megawatt hour after closing up 20% yesterday. Then Putin’s words triggered a strong retracement with even negative prices (currently -4.4% at 110.9 euros per megawatt hour). Down in the order of 7% to $ 5.90 for the NY-listed natural gas futures.
EU on alert, towards gas market reform by the end of the year
The sudden boom in gas prices risks impacting the European economic recovery and Brussels intends to intervene decisively. The EU Commissioner for Energy, Kadri Simson, announced today that the European Commission will propose a reform of the gas market in the EU by the end of the year. Speaking at the European Parliament today in Strasbourg, Simson stressed that the issues relating to storage and security of supply will be examined. “Other ideas have been put forward by Member States and MEPs, such as forms of joint purchase of emergency gas reserves: we are analyzing them all, ”he added.
The Italian premier Mario Draghi he said he was in favor of the hypothesis of a European gas storage consortium. “Certainly – said Draghi – I think it is very positive not to be caught unprepared for peaks in energy that not only have consequences on the economy but also on the distribution, on inequality “.