Authored by Tsvetana Paraskova via OilPrice.com,
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In the past week, nearly all commodity markets have crashed amid growing fears of a recession, but one commodity price continues to rise.
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A combination of reduced supply from Russia and an outage at the U.S. Freeport LNG facility has sent natural gas prices soaring.
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One analyst compared today’s natural gas markets to the oil markets of the 1970s, with supply shortages highlighting its importance.
While crude oil and other commodity prices have plunged in the past week amid growing fears of recession and less liquid markets in the summer, one commodity is bucking the trend and continuing to rise - European natural gas.
Benchmark gas prices in Europe at the Dutch TTF hub hit their highest level in nearly four months earlier this week. Prices have shot up by a mind-blowing 700% since the beginning of 2021. And we likely haven’t seen the biggest rally yet, analysts say.
Europe’s Gas Prices Buck The Trend In Recent Weeks
Gas prices started soaring amid the energy crisis in the autumn of last year. Then the crisis reached a whole new level after the Russian invasion of Ukraine in late February, which prompted the E.U. to race to replace as much Russian gas supply as possible, while Russia slashed deliveries to major customers—including Germany and Italy—in the middle of June. In the three weeks since Russia reduced supply to Europe and an outage at the U.S. Freeport LNG facility halted exports, European gas prices have jumped by 60%.
The front-month TTF futures contract surged by 8% to $179 (175 euro) per megawatt-hour (MWh) on Tuesday, hitting...