European natural gas prices climbed again on Jan. 13 after easing back earlier this week amid assurances from the U.S. that any potential sanctions imposed if Russia invades Ukraine will not disrupt the continent’s short-term energy supplies.
The benchmark front-month gas contract (currently February) on the Dutch TTF Gas Futures had fallen to €74.66 per megawatt-hour by 2.35 p.m. (GMT) in Amsterdam on Jan. 13. A week ago, on Jan. 6, the contract was at €98.15 a megawatt-hour as of 4:59 p.m. (GMT) amid concerns about continued lower Russian gas shipments to Europe.
But European gas prices surged again on signs that security talks between Russia and the U.S. and NATO this week had hit a dead end, re-igniting fears of Russian military action in Ukraine, a move repeatedly denied by Russia. The front-month gas contract had moved up to €91.45 per megawatt-hour by 12.59 p.m. (GMT) on Jan. 14.
The news had been positive at the turn of the year, with more arrivals of U.S. liquefied natural gas (LNG) helping offset Europe’s low gas storage levels and the reduced Russian gas flows to the region (GM Jan. 7, p. 1).
According to a Jan. 13 report by Bloomberg, citing ship-tracking it has compiled, at least 16 U.S. LNG cargoes have confirmed destinations for northwest Europe – with nine of them due in the U.K. – over a two-week period. Europe received 29 LNG cargoes in the second half of December, according to Bloomberg.
News of “a flotilla” of U.S. LNG cargoes heading for Europe had seen the TTF front-month contract drop over 60 percent on its pre-Christmas high as 2021 moved to its close, with the contract settling at €70.34 per megawatt-hour by close of the day’s trading (GM Dec. 31, 2021).