European gas prices hit a two-week high on Wednesday, pushed higher by colder weather and Germany triggering an emergency plan to manage gas supplies.
The April-dated TTF and NBP contracts closed 10.3% and 7.7% higher respectively on Wednesday. The Dutch marker settled at the equivalent of USD 38.93/MMBtu – USD 1.68/MMBtu higher than the UK gas benchmark.
Colder weather across Europe once again helped push prices higher. Germany declaring an early warning level for potential gas shortages also lifted prices, with Berlin triggering the emergency plan due to possible disruption to Russian gas imports.
Germany expects potential gas shortages after the Kremlin requested payment for Russian gas in rubles. However, Russian president Vladimir Putin reportedly told German Chancellor Olaf Scholz on Wednesday that European nations can continue to pay for gas in euros via Gazprom bank – which will convert payments into rubles.
Across the pond, US gas benchmark Henry Hub staged a recovery, closing 5% higher at USD 5.61/MMBtu.
Asian LNG marker JKM stopped the rot, closing 0.8% higher at USD 34.15/MMBtu.
Oil prices also staged a recovery on Wednesday, however prices were down sharply on Thursday morning amid reports suggesting the US is mulling the release of up to 180 million barrels of crude from its Strategic Petroleum Reserve, with the proposed drawn down the largest since the establishment of the reserve ~50 years ago.
The front-month Brent and WTI contracts settled 2.9% and 3.4% higher respectively on Wednesday, with the former closing at USD 113.45/barrel and the US crude benchmark closing at USD 107.82/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.
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