Title: Natural gas prices in Europe soar on pipeline setback
Nov 17, 2021 07:30AM ET
The price of natural gas surged again in Europe on Wednesday after a delay in the approval process for a major new pipeline from Russia added to concerns about whether the continent will have enough gas this winter.
Germany's energy regulator on Tuesday suspended the procedure for bringing the Nord Stream 2 pipeline online. This dampened hopes that the pipeline would deliver significant gas volumes in the coming months and sent tremors through energy markets.
The gas price for next month in the Netherlands, which is considered a benchmark for Europe, rose almost 8% to €101.30 per megawatt hour (MWh) on Wednesday, its highest level since October 18.
The price of gas at the start of next year has also risen as the market does not expect major gas flows through Nord Stream 2 until towards the end of the coming heating season, so demand may have peaked by then.
The Dutch contract for January gas jumped 7.8% to €101.61 per MWh on Wednesday, while the UK wholesale price for gas in the first three months of 2022 rose almost 12% to £2.45 per therm.
European governments are seeking to mitigate the impact on consumers and businesses with emergency measures such as price caps and subsidies. One of the world's largest energy traders, Trafigura, also warned on Tuesday that Europe could face blackouts this winter because of low supply.