Natural gas supply concerns continue to feed fears and push futures higher. As of Wednesday, the October Nymex contract was trading up over 17 cents, and Europe is in focus.
Natural gas prices in Europe continue to rise, and U.S. prices are rallying around this, as well, responding both to European price jumps and concerns about storage capacity on both sides of the Atlantic.
Year-to-date, the key benchmark price in Europe—the Title Transfer Facility (TTF, a Dutch virtual hub)—has shown an increase of 245% and a YOY increase of an astounding 520%, based on the latest data shared by Standard Chartered.
LNG exports aren’t ready to step in to do anything about it.
We have now reached a point where Americans might have to adjust their geopolitical thinking about Russia’s Gazprom-led Nordstream 2 pipeline. This is precisely where geopolitics hits the pocketbook—but not in the way that fits into the American narrative against Nordstream and the political leverage that could give Putin over Europe.
Even a regularly cold winter in Europe will send prices--which shot up another 10% just on Wednesday--soaring much further. Anything slightly colder than the norm will be a price shock of new proportions.
Another factor is Nord Stream itself. Prices jumped again Monday partly in response to news that it could take four months to clear Nord Stream for operations. Immediately prior to that, Gazprom thought it was going online on October 1st.
Why…
Natural gas supply concerns continue to feed fears and push futures higher. As of Wednesday, the October Nymex contract was trading up over 17 cents, and Europe is in focus.
Natural gas prices in Europe continue to rise, and U.S. prices are rallying around this, as well, responding both to European price jumps and concerns about storage capacity on both sides of the Atlantic.
Year-to-date, the key benchmark price in Europe—the Title Transfer Facility (TTF, a Dutch virtual hub)—has shown an increase of 245% and a YOY increase of an astounding 520%, based on the latest data shared by Standard Chartered.
LNG exports aren’t ready to step in to do anything about it.
We have now reached a point where Americans might have to adjust their geopolitical thinking about Russia’s Gazprom-led Nordstream 2 pipeline. This is precisely where geopolitics hits the pocketbook—but not in the way that fits into the American narrative against Nordstream and the political leverage that could give Putin over Europe.
Even a regularly cold winter in Europe will send prices--which shot up another 10% just on Wednesday--soaring much further. Anything slightly colder than the norm will be a price shock of new proportions.
Another factor is Nord Stream itself. Prices jumped again Monday partly in response to news that it could take four months to clear Nord Stream for operations. Immediately prior to that, Gazprom thought it was going online on October 1st.
Why gas prices have risen so much for Europe remains another aspect of the geopolitical debate. Moscow claims it is because the European Commission “invested market pricing for gas”, removing natural gas from oil-indexed pricing. Washington squarely blames Russia, saying the Kremlin is manipulating the situation by reducing its gas flows through Ukraine to purposefully tighten the market ahead of Nord Stream’s unleashing.
Of course, Russia is now using this situation to leverage a speedy German approval process to get things online. Gazprom finished Nordstream 2 construction last week, but on Monday, the German energy regulator said it had four months to complete certification of the pipeline before it could go online. It didn’t explicitly say it would take four months, but made it clear it had that long to do it, making it a cat-and-mouse game.
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