Another 12% jump for natural gas to 250 euros

LAST UPDATE 16:40

The price of natural gas in Europe continues its steady upward trend, reaching 250 euros, as extremely high temperatures in the region intensify demand for electricity while Russia keeps flows to a minimum.

In particular, the natural gas contract for September delivery in Amsterdam (TTF) reached the high of the day at 251 euros the megawatt hour, with a new rally almost 12%while now it has fallen slightly to 241 euros with +9.5%.

High temperatures and prolonged drought have caused Europe’s river water levels to drop rapidly, making it difficult to transport energy products.

Which will likely prompt utilities to resort to increased use of natural gas at a time when supplies from Russia continue to be sharply reduced.

“The relentless rise in European natural gas continues,” analysts at Deutsche Bank Research said in a note.

“Prices are being boosted by the latest European heat wave, which is causing rivers to dry up and causing fuel transport problems, further exacerbating the continent’s current woes on the energy front,” they point out.

Water levels at a critical point on the Rhine – western Europe’s most important river for transporting fuel and other industrial goods – hit a new low this week, making the crossing unprofitable for many barges.

In addition, Russia’s state-owned Gazprom warned today that gas prices could soar this winter by as much as 60% to 400 euros per megawatt hour, citing Western sanctions.

Oil changes

At the same time, jitters prevailed in oil trading, with prices changing signs, a day after they fell sharply by 3% in the wake of an unexpected slowdown in economic activity in the world’s second-largest economy, China.

In particular, his October contract Brent from losses that had exceeded 1.5% to gains of more than 0.7% and then returned to negative territory, with -0.9% at 94.3 dollars the barrel.

Similarly, the American WTI September now declines by 0.75% with its price set at 88.9 dollars the barrel, while it had reached up to 90.65 dollars.

The market now awaits U.S. inventory data due later in the day, which is expected to show likely declines in oil and gasoline last week, while distillate inventories are expected to have risen.