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Gazprom says gas prices could destabilize the European economy

The logo of the Russian gas giant Gazprom can be seen on a board at the St. Petersburg International Economic Forum (SPIEF), Russia, June 6, 2019. REUTERS / Maxim Shemetov / File Photo

ST. PETERSBURG, Russia, October 7 (Reuters) – Europe’s rising gas prices could destabilize the region’s economy, the head of the export division of Russian gas producer Gazprom (GAZP.MM) said at a market forum on Thursday.

Prices have soared more than 800% this year, raising concerns about inflation and energy poverty this winter.

They have eased this week, which has given the markets some relief. Continue reading

“The European spot market is currently experiencing high price volatility and confusing both buyers and sellers, which harbors the risk of destabilizing the entire regional economy,” said Elena Burmistrova, head of Gazprom Export.

“The European spot market only reflects the current demand and supply situation, but is not the price instrument that creates a long-term balance.”

Burmistrova reiterated that Gazprom is meeting its obligations under its long-term contracts, which its largest European customers have also confirmed.

“We supply gas in addition to contract inquiries where we have such a technical capability,” she said. Continue reading

On Wednesday, the gas price at the Dutch TTF hub rose to 155 euros per megawatt hour (MWh) before falling after statements by Russian President Vladimir Putin. On Thursday it was 102 euros per MWh.

Putin said Moscow does not need gas market turbulence, adding Russia should sell more gas on its St. Petersburg exchange, which sells gas to European spot buyers. It was not immediately clear which routes Russia would use for this.

Reporting by Oksana Kobzeva and Katya Golubkova; Adaptation by David Goodman and Jason Neely

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