Both the Islamist Hamas attack on Israel and a leak in a pipeline between Finland and Estonia have left their mark on the energy market.
The European gas price rose above the round mark of 40 euros on Monday. In the morning, the trend-setting futures contract TTF for delivery in one month on the Amsterdam stock exchange cost up to 41.80 euros per megawatt hour (MWh). That was almost ten percent more than on Friday. The price last rose above the 40 euro mark about a week ago.
On the one hand, the market referred to a gas pipeline between Finland and Estonia, which was closed at the weekend due to a drop in pressure. According to the Finnish operator, a leak is considered possible, but the investigations have not yet been completed. Although the incident does not yet pose a threat to European gas supplies, it highlights the vulnerability of the supply network.
On the other hand, market participants cited the attack on Israel by the Islamist Hamas as the reason for the price increases. The reaction of oil prices, which rose sharply on Monday, was clearer than that of natural gas prices. The reason is the fear that the conflict between Hamas and Israel could expand.
Despite recent increases, the price of European natural gas remains well below the level reached during Russia’s war against Ukraine. At times last year, more than 300 euros per megawatt hour were due. Russia had significantly reduced its gas deliveries to Europe, which is why replacements had to be found.
Source: Stern
