The news from Russia has impacted the energy market. At times, the price of natural gas rose by more than ten percent. Compared to the summer of 2022, however, gas is still cheap.
Uncertainties about the situation in Russia after the Wagner mercenaries revolt pushed gas prices up today. At times, the TTF future, which is considered a reference and is traded on the Dutch futures market, climbed by around 13 percent to EUR 36.935 per megawatt hour. Currently, the price has fallen below the 34 euro mark again.
Nevertheless, the price has increased significantly since the beginning of this month. On June 1, the prices were still at EUR 23.103. This is put into perspective when looking at the long-term price development: On January 2nd, the price was still EUR 82.259.
The price on the Dutch futures market peaked in the summer of last year at EUR 345 per megawatt hour. In June 2021 it was just over 17 euros.
Russian gas has lost importance
However, should the situation in Russia deteriorate again, further market reactions on the gas market cannot be ruled out. “Markets don’t typically respond well to events that are developing and uncertain,” said Quincy Krosby, chief strategist at LPL Financial. This is particularly so in connection with Vladimir Putin and Russia.
The geopolitical risk associated with Russia is now significantly higher than before the weekend, Tom Marzec-Manser, head of gas analysis at ICIS in London, told Bloomberg news agency. There is “uncertainty about what could happen in Russia itself and not in Ukraine in the coming weeks.” That drives up the price of gas.
However, Germany and Europe as a whole have greatly reduced their dependence on Russian gas in recent months, and Russia has long since lost its dominant role in European gas supplies.
In 2021, the country’s share of the European gas supply was still around 40 percent. Today it is considerably less. To replace gas from Russia, the EU has increasingly turned to global suppliers of liquefied natural gas (LNG).