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Energy crisis: Putin's appearance causes gas prices to drop significantly

2021-10-29T18:14:39.570Z


From November 8th, Putin wants to deliver more Russian gas to Europe. The markets react immediately.


Enlarge image

Has what many in Europe want: Russian President Vladimir Vladimirovich Putin

Photo: Yevgeny Paulin / imago images / ITAR-TASS

Following instructions from Russian President Vladimir Putin to increase gas deliveries to Europe, the price on the TTF gas market in the Netherlands fell sharply.

Between Wednesday evening and Friday, the price fell by around a fifth to less than 70 euros per megawatt hour.

In the early afternoon the price was exactly 68.53 euros.

The price of British natural gas for delivery next month fell similarly within a week.

Both prices had reached record highs on October 6th: The TTF price rose to 162.125 euros at the time.

Since then they have fallen again, but are still well above the level from early summer.

Drought, little wind and the post-corona boom

The cause of the high prices is seen to be a combination of different factors: On the one hand, the strong economic recovery has fueled demand for gas all over the world. In addition, there was a low wind spring in Europe, failures at hydropower plants due to droughts in China and Northern Europe. In addition, many EU countries did not allow their gas storage facilities to be adequately replenished before winter. In all of this, there was mixed concern that Russia would not compensate for the high demand with higher deliveries this time either, as it had done in previous years, because the Kremlin wanted to build pressure for a faster commissioning of the controversial Nordstream 2 gas pipeline.

According to Commerzbank analysts Carsten Fritsch and Barbara Lambrecht, it was clearly the instruction of Russian President Putin to start delivering more gas from November 8th that led to the easing of price pressure in Europe.

One third of the natural gas consumed in Europe comes from Russia.

In particular, Putin had instructed Gazprom to fill the gas storage facilities in Germany and Austria.

The gas storage facilities in Germany are currently only 70 percent full, as the analysts emphasized.

On average in the EU, the storage facilities are 77 percent full.

Normally the storage tanks are 90 percent full at this time of year - before the heating season in winter.

beb / afp

Source: spiegel

All business articles on 2021-10-29

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