By Alexander Miller, for Eurasia Business News – October 6, 2021
The price of gas in Europe at the opening of trading on October 6 again reached a historic record – $ 1900 per 1,000 cubic meters, according to data from the London Intercontinental Exchange ( ICE ). However, in 10 minutes the price dropped by more than $ 200, to $ 1679 per 1,000 cubic meters. November futures at the TTF hub in the Netherlands first crossed the mark of $ 1550 per 1,000 cubic meters, and at the peak the price was $ 1936 (11:28 Moscow time). As the heating season of 2021/22 is just beginning, further increase in prices is expected.
Trading on the Moscow Exchange opened at 10:00. The price of Gazprom shares by 11:14 am on October 6 amounted to 390.52 rubles (4.67 euros). This is a record value for the Gazprom’s shares.
The day before, despite the start of gas supply to the Nord Stream-2 gas pipeline, gas futures in Europe rose by more than 20%. In connection with the continuing rise in prices, France, Spain, Czech Republic, Romania and Greece called for an investigation into the “functioning of the European gas market”.
The historical record for the gas price of a day-ahead contract on TTF was recorded on March 1, 2018 – 76 euros per MWh, or $ 969 per thousand cubic meters.
The cost of gas on the European market has skyrocketed in recent weeks – if at the beginning of August securities for the supply of fuel were traded at $ 515 per thousand cubic meters, then a month later they rose to $ 614, by the end of September they doubled in price, and in the last two days they increased by another 30 percent.
This inflation of gas prices can be partly explained by the simultaneous restart of the world economies after the coronavirus crisis. Another source of this inflation is the more severe regulation against coal and over gas industry, which has reduced the amount of investments in the past recent years. The decrease of investments has generated a decrease of gas production. Lastly, the bans and regulation on coal use for energy have caused a greater demand for gas.
Exchange rate as of 2021-10-06 at 13:29 UTC : 1 EUR = 1.15 US Dollar
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