The spot price of gas at the Title Transfer Facility (TTF), a virtual trading point for natural gas in the Netherlands, for delivery on March 15 rose to $229 per thousand cubic meters,
The current price is the highest since February 11.
Last week alone, natural gas rose in price by 11% in Europe, and since the beginning of March, it went up by 16%.
In 2021, the average price of a day-ahead contract at the TTF hub was $234 per thousand cubic meters.
Gas prices are rising amid continuing increases in the prices for carbon dioxide permits. There is a clear relationship between the cost of CO2 quotas and the price of gas: with expensive quotas, cleaner gas generation is more competitive than coal-fired power plants.
Besides, this week Norway will cut gas supplies to Europe from the Aasta Hansteen and Gullfaks fields.
Meanwhile, the level of gas reserves in underground storage facilities (UGS) in Europe dropped to 32.56% on early March 14. It is 4.9 percentage points below the average of the past five years.
According to Gas Infrastructure Europe (GIE), gas reserves in Germany (primary gas market in Europe) decreased to 27.27%, in Austria - to 31.79%, the Czech Republic - 31.56%, Poland - 41.57%, France - to 18.72% (the lowest level among the countries of the region), in Ukraine - to 40.26%.
Gas withdrawal from UGS in Europe continues until approximately the end of March (in 2020, net withdrawal was replaced by net injection on April 3; in 2019 - March 22). Gas withdrawal from UGS facilities in Europe for the fourth quarter of 2020 and the first quarter of 2021 can be predicted at 83.2 billion cubic meters. Gas withdrawal for the warmer winter season of 2019-2020 was equal to 47.9 billion cubic meters.
In mid-January, the cost of natural gas at the TTF hub amounted to a record $337 per thousand cubic meters. At the same time, spot gas prices in Asia exceeded $1,000 per thousand cubic meters.