The Strategist

Gas prices soar in Europe because of the heatwave

06/21/2021 - 03:48

Gas prices in Europe have soared to $363 per thousand cubic metres because of the heat. This is the highest since the beginning of March 2018.

The average "day-ahead" contract price on the TTF since the beginning of 2021 has already been $264 per thousand cubic metres. 

The heat wave is provoking an increase in energy consumption for air conditioning, as power plants are consuming more gas to make up for what could have been wasted during the cold winter in their underground gas storage facilities.

During the working days of June 14 to 18, storage was reduced by an average of 17 percent compared to the five-year average for these dates. At 44.33 per cent, the current level of gas in storage is the lowest it has ever been on the пas Infrastructure Europe base.

It was previously reported that Europe is so short of natural gas that the region has switched to coal. This is the only way to meet electricity demand, which has now returned to pre-demand levels. Coal use in Europe jumped 10 to 15 percent this year after a cold and long winter depleted gas storage capacity. Stocks are now 25 per cent below the five-year average.