European gas wholesalers are on a rollercoaster ride this summer as prices start to rise again
European wholesale gas prices continued to ride a roller coaster on futures markets, marking a renewed bout of volatility that had worried the European Union Commission since the surge in energy prices in the months following Ukraine’s invasion last year .
On Friday, wholesale gas prices for September delivery in the futures markets rose 8.5%, while the December contract rose over 3%.
This followed a pattern of recent weeks of large declines followed by large price increases as traders assessed the risks of looming strikes at a liquefied natural gas (LNG) export facility in Australia.
By the start of the summer, prices had plummeted as EU countries weathered the winter without shortages of the key fuel used to generate significant amounts of electricity across the continent. The recent price increases have come despite European deposits being rapidly filled ahead of next winter.
Last year, the EU Commission was alarmed when the price of gas rose to over 300 euros per megawatt hour in late summer and threatened to drive energy bills for households and companies to prohibitive levels. The spot price for European gas was just €27 at the end of July before briefly rising to €43 last week.
“The European market is oversupplied pending the possible arrival of cold weather,” said Jonathan Stern, senior researcher at the Oxford Institute for Energy Studies. “But that kind of ‘rumor volatility’ should be with us for at least another year.”
Comments are closed.