The Nord Stream 1 pipeline, through which Russian natural gas flows to Germany since 2011, will be shut down for about 10 days for scheduled maintenance work.
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Natural gas prices are rising around the world as scorching temperatures increase demand for the fuel and as Europe’s push to move away from Russian fuel has rattled global energy markets.
US natural gas contract rose more than 11% at one point on Wednesday to $9.75 per million British thermal units (MMBtu), the highest since July 2008. The contract then fell slightly and traded at 9. $.36/MMBtu at 9am on Wall Street to increase. is 7.3%.
Natural gas is now up more than 77% on the month, putting it on track for its best month since the start of the contract in 1990.
“While the extent and pace of recent natural gas price increases contribute to non-fundamental market dynamics, supportive fundamentals remain a key driver,” EBW Analytics Group wrote in a note. for customers.
“Basically, scorching hot weather is the main driver of price increases,” the company added.
The August contract expires on Wednesday, which is increasing volatility ahead of time. Volume is often thin before expiration, meaning that individual trades can lead to overly large market moves.
However, the September contract rose more than 7% on Tuesday to trade around $9.21/MMBtu.
In Europe, the Dutch TTF natural gas contract rose 10% to 194.50 euros per megawatt-hour. The move follows a 10% increase on Monday after Gazprom said it would further reduce flows through the key Nord Stream 1 pipeline.
Starting Wednesday, the pipeline will only operate at 20% capacity. Gazprom said the reduction was due to turbine maintenance.
“This is not the end of Russia’s weaponization of natural gas flows, in our opinion, and there are still very few short-term alternatives to the current reduced flows even to the EU. – loan [to] RBC wrote last week in a note to clients.
European Union countries on Tuesday reached a voluntary agreement to reduce gas consumption by 15% starting next month. In the event of an emergency, the proposed cuts will become mandatory.
“The purpose of reducing gas demand is to save before winter in preparation for possible disruption of gas supplies from Russia, which is constantly using energy supplies as a weapon. “, unit said in a statement.
UK natural gas futures rose 11.7% on Tuesday.