Europe gas prices rise 60% in two weeks as Russia reduces supply

The price of natural gas per megawatt-hour in Europe increased 60% over the last two weeks, with global gas supply decreasing due to technical issues. 

The price of natural gas per megawatt-hour for July contracts in Europe, trading on the Netherlands-based virtual natural gas trading point (TTF), rose to €127.17 ($133.49) at closing on Wednesday, a 60% jump from €79.40 ($83.35) on June 8.

The megawatt-hour price of natural gas, traded at €79.40 on June 8, was the lowest closing level over the last four months since the start of the Russia-Ukraine war on Feb. 24.

On June 16, natural gas closed at €124.36 to reach the highest closing level since March 31.

The decrease in the quantity of natural gas from Russia to Europe and the closure of the Freeport LNG terminal in the US state of Texas due to fire have pushed gas prices higher.

Russian energy company Gazprom announced on June 14 that daily gas shipments to Europe via the Nord Stream line have reduced from 167 million cubic meters to 100 million cubic meters. As of June 16, Gazprom said it will only supply up to 67 million cubic meters of gas through the line.

Shipments via the Yamal-Europe line have stopped, and shipments via Ukraine have decreased by about half, according to Gazprom's previous announcements.

In addition to lowering the quantity of gas supplied to Europe, Russia also stopped shipments to Poland, Bulgaria, Denmark, Finland and the Netherlands, citing breaches of contract for not complying with the ruble payment system it insisted on.

On the US side, the Freeport LNG terminal in Texas has been shut down since June 9 due to a fire. Initially, the shutdown was planned for three weeks but officials later announced it would be extended until the end of the year.