Pricewatch | 01 Apr 2022 | Gas Matters Today

European gas prices soared on Thursday as market participants weighed up mixed messages from Russian president Vladimir Putin.

The April-dated TTF and NBP contracts closed 16% and 13.8% higher respectively on Thursday. The Dutch marker settled at the equivalent of USD 40.94/MMBtu, with the UK gas benchmark closing at the equivalent of USD 39.37/MMBtu.

Gas prices jumped after Russian President Vladimir Putin announced that he signed a decree on transitioning to payments for natural gas in rubles concerning “unfriendly countries” including EU nations.

Buyers of Russian gas will need to open ruble accounts in Russian banks – that have not been hit by Western sanctions, such as Gazprombank – in order to pay for supplies from 1 April, Putin said, his strongest signal to date that Russian gas supplies to European customers will be cut off.

However, Putin later said gas flows would not be stopped from 1 April.

Following Putin signing the decree, France and Germany both announced that they would not pay for Russian gas in rubles.

The signing of the decree comes as Europe faces a cold snap, which is expected to drive gas demand.

Across the pond, US gas benchmark Henry Hub continued to climb, closing 5.7% higher at USD 5.64/MMBtu.

Asian LNG marker JKM recorded a 4.6% gain to close at USD 35.44/MMBtu.

Oil prices fell on Thursday after the Biden administration announced a record release from the US’ Strategic Petroleum Reserve. The US will release 1 million barrels/d of crude for a six month period, starting in May. The US president also suggested allied nations could release a 30-50 million barrels of oil in a bid to tame rising prices.

The front-month Brent and WTI contracts settled 5% and 3.8% lower respectively on Thursday, with the former closing at USD 104.71/barrel and the US crude benchmark closing at USD 100.28/barrel.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.