Wholesale gas price at highest level in more than year as Russian supplies stop
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Prices highest since October 2023 after transit deal ends as storage supply levels in Europe fall at fastest pace since 2021. The wholesale price of gas has risen to its highest level in more than a year after Russian supplies stopped flowing to Europe through Ukraine.
Benchmark prices rose to the highest level since October 2023, a day after a longstanding transit contract between Russia and Ukraine expired. Russian gas deliveries across Ukraine expired in the early hours of New Year’s Day after an agreement signed in 2019 expired.
Traders had been expecting the loss of Russian gas, with no alternative in place, and are closely monitoring whether it will lead to quicker withdrawals from storage facilities. The price of gas for February delivery in the Netherlands rose as much as 4.3% on Thursday, before easing back to 1.9% higher at €49.83 a megawatt-hour, Bloomberg reported.
Storage supply levels across Europe are already falling at the fastest pace since 2021, as the conflict between Russia and Ukraine escalated. Russia’s full-scale invasion of Ukraine in February 2022 set off the largest conflict in Europe since the second world war, pushing up the price of wholesale gas and leading to a rise in energy bills and forced the UK government to intervene to subsidise household costs.
Ukraine’s president, Volodymyr Zelenskyy, described the end of the transit deal as “one of Moscow’s biggest defeats” in a post on social media. Sign up to Business Today. Get set for the working day – we'll point you to all the business news and analysis you need every morning.
