RTTue, 05 Jul 2022 18:08 UTC
© Getty Images / Peter Dazeley
Natural gas prices in Europe rose to the highest level in almost four months on Tuesday as the continent's energy crisis intensifies.
Benchmark futures tied to TTF, the European wholesale gas price, jumped 8% to over $1,800 per thousand cubic meters or €175 per megawatt hour in household terms. That is the highest level since the beginning of March and five times more than it was this time last year.
The prices jumped as oil and gas workers in Norway, Europe's second-biggest supplier after Russia, went on strike over pay. According to Reuters, the industrial action could cut the country's gas exports by almost 60% over the course of this week.
This comes as uncertainty grows over the gas flow to Europe from Russia. Last month, Gazprom slashed its supplies via the Nord Stream pipeline to Germany, citing technical issues stemming from Ukraine-related sanctions. The pipeline is also due to close for its annual 10-day maintenance next week, with many in the EU fearing that the gas flow will not be turned back on.
On March 7, two weeks after the start of Russia's military operation in Ukraine, gas prices in Europe reached a historic maximum of $3,900 per thousand cubic meters.
Comment: More on the
potential crisis from RT:
Electricity prices in Europe have hit their highest level on record, the Financial Times reported on Tuesday, citing the rising cost of natural gas amid the uncertainty over Russian supplies.
German baseload power for delivery next year, which is the benchmark European price, traded at €325 ($334) per megawatt hour (MWh) on Monday, thus surpassing the previous record set in December, the newspaper writes. Last July, the price stood at just over €81 ($83) per megawatt hour. The equivalent contract in France has doubled to €366 ($377) per MWh since the start of the year, the FT adds.
Electricity prices are influenced by the cost of natural gas, which is used to generate power. Gas prices in Europe exceeded $1,800 per thousand cubic meters for the first time since early March on Tuesday, as oil and gas workers in Norway have gone on strike over pay, thus affecting output.
According to the FT, the situation has been exacerbated by maintenance problems at a large number of France's nuclear plants, due to which neighboring countries have been burning additional gas to generate electricity for the country.
Also, the Nord Stream 1 gas pipeline between Russia and Germany is scheduled to close for maintenance next week. Moscow already had to reduce the flow via the pipeline by 60% last month over technical issues caused by Western sanctions, but many in the EU fear that after the planned shutdown the gas flow will not be switched back on.
Germany triggered the second stage of its three-level emergency plan last month. The third stage would require the rationing of gas to households and industrial sites. A housing cooperative in Saxony has already reportedly introduced hot-water rationing, with similar warnings issued in Hamburg as well.
For crying out loud, give them the raise. Or is it better to have zero gas for people?