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LNG: Sharp Rise In European Gas Prices Ahead Of End To Russian Flows

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European natural gas prices rose sharply on the last day of 2024 with the agreement allowing the transit of Russian gas through Ukraine due to expire the next day. An alternative has yet to be sorted and Gazprom announced that flows halted on Wednesday. There are also concerns that a shift to colder weather in January will also increase the rate of inventory drawdown with storage levels currently under 75%.

  • European gas rose 5.6% on Tuesday to EUR 50.23 to be up 5.7% in December and the highest level in 2024 to be 32.1% higher on the year.
  • Slovakia, Austria and Moldova will be particularly impacted by the end of Russian pipeline flows through Ukraine, but there are concerns that energy bills will also rise in the UK.
  • Russian supplies on this route are estimated to account for around 5% of European consumption, according to Bloomberg. Europe aims to replace this gas with increased LNG imports and flows from Norway, but this makes them more vulnerable to global supply disruptions. One Russian pipeline that supplies Serbia and Hungary remains in operation. The one into Poland is shut.
  • European Commission President von der Leyen aims to end EU use of Russian fuels by 2027. The EC said that the group knew the deal would end on January 1 and is prepared.
  • In contrast, US gas fell 7.7% to $3.63 after soaring 15.8% on Monday on forecasts for colder weather. It ended the month 22.2% higher. Snow and ice are still expected for the eastern and central US, according to AccuWeather.
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European natural gas prices rose sharply on the last day of 2024 with the agreement allowing the transit of Russian gas through Ukraine due to expire the next day. An alternative has yet to be sorted and Gazprom announced that flows halted on Wednesday. There are also concerns that a shift to colder weather in January will also increase the rate of inventory drawdown with storage levels currently under 75%.

  • European gas rose 5.6% on Tuesday to EUR 50.23 to be up 5.7% in December and the highest level in 2024 to be 32.1% higher on the year.
  • Slovakia, Austria and Moldova will be particularly impacted by the end of Russian pipeline flows through Ukraine, but there are concerns that energy bills will also rise in the UK.
  • Russian supplies on this route are estimated to account for around 5% of European consumption, according to Bloomberg. Europe aims to replace this gas with increased LNG imports and flows from Norway, but this makes them more vulnerable to global supply disruptions. One Russian pipeline that supplies Serbia and Hungary remains in operation. The one into Poland is shut.
  • European Commission President von der Leyen aims to end EU use of Russian fuels by 2027. The EC said that the group knew the deal would end on January 1 and is prepared.
  • In contrast, US gas fell 7.7% to $3.63 after soaring 15.8% on Monday on forecasts for colder weather. It ended the month 22.2% higher. Snow and ice are still expected for the eastern and central US, according to AccuWeather.