The price of gas in Europe started to rise again. After the TTF futures contract on the Amsterdam energy exchange, which sets the trend for European gas trading, remained steady at the 200 euros per megawatt hour mark in the first two weeks of August, it rose sharply throughout the week. for just under 251 euros. Natural gas traded in Europe at 237 euros per megawatt hour on Friday. For comparison: a year ago, it was around 50 euros.
Only in the period immediately after the outbreak of the war in Ukraine was the price of natural gas traded in Europe slightly higher, peaking at more than 300 euros in early March.
The reduction in Russian natural gas delivery volumes to Europe is seen as a price driver. The capacity of the important Nord Stream 1 pipeline has been reduced to 20%. Many European customers are therefore forced to switch to expensive alternatives.
The sharp rise in the price of gas is putting increasing pressure on industrial companies that demand large amounts of natural gas. For example, with the Budel smelter, a zinc smelter in the Netherlands will temporarily stop production from September, according to the company. As a result, the price of zinc has increased significantly.
quintuple
Just before the weekend, gas prices remained high and traded at 237 euros per megawatt hour on Friday morning. For comparison: a year ago, natural gas was traded at around 50 euros in Europe. The jump in prices is also one of the main reasons for the rise in inflation. In July, annual inflation in the euro zone hit a record 8.9%.
Friday’s data on German producer price developments show how much the high price of gas is affecting companies. The prices companies charge for their products rose 37.2% year-over-year in July, the fastest pace ever. Energy continues to be the main driver of the increase in commercial producer prices. According to Germany’s Federal Statistical Office, the evolution of natural gas prices has the greatest influence, with an increase of almost 164% over the previous year.