European Spot Gas Prices Surge to USD 622 per 1,000m³, While Slovakia Considers Blocking Supply to Ukraine

At the close of trading on February 10 in the Netherlands, the European spot price for natural gas surged to USD 622 per 1,000 cubic meters—a 5% increase in just one day. According to Interfax, this level is the highest seen since February 7, 2023. Experts forecast that gas prices will continue to rise as colder weather sets in across Europe.

Supply Shortages Add Pressure

Beyond the impact of lower temperatures, gas prices are also being driven higher by supply constraints in Ukraine. After Ukraine halted the transit of natural gas from Russia’s Gazprom through its territory, it has been forced to purchase gas on the European spot market. This shift has intensified pressure on supply. At the same time, European underground gas storage levels have plummeted to below 50%. With high consumption expected this winter, European countries will need to import significantly more LNG during the summer to rebuild storage levels to the targeted 90% before the next peak consumption season. These factors, combined with Gazprom’s supply limitations, are expected to keep upward pressure on prices well into 2025.

Shifting Energy Mix and Increased LNG Demand

In addition to the supply issues, a decline in wind power generation has forced Europe to rely more on gas-fired power plants to meet electricity demands. With the capacity of pipeline supplies already limited, European buyers are increasingly turning to LNG imports. This surge in LNG demand is intensifying competition with Asian markets, thereby pushing spot gas prices even higher.

Slovak Government’s New Stance

On the morning of February 11, Slovak Prime Minister Robert Fico announced that his government is prepared to block the supply of European gas to Ukraine via Slovakia. This move is intended as a countermeasure in response to Ukraine’s decision to stop transiting Russian gas through its territory. Fico’s statement underscores the potential for geopolitical measures to further influence the regional gas market dynamics.

Reference source: The Internet