Gas prices for the European market hit this year's high, topping 41 euros per MWh

Wholesale gas prices for the European market are surging today, reaching their highest level this year. At around 11:15 CEST, the price of the key futures contract for gas delivery in September at the Title Transfer Facility (TTF), a virtual trading hub in the Netherlands, was above 41.20 euros per megawatt-hour (MWh), up more than two percent on the day. The TTF price is the benchmark for the European gas market.

Analysts say the continued rise in prices is driven by concerns about the continuation of gas transit from Russia through Ukraine. In recent days, following the incursion of Ukrainian forces into Russian territory, fighting has taken place near the town of Sudzha, where the last operating transit point for Russian gas exports to Europe via Ukraine is located.

„We believe the risk of military operations in Sudzha remains a supportive factor (for prices),“ LSEG gas market analyst Tomasz Marcin Kowalski told Reuters.

Russian gas company Gazprom said, however, that it would send 39.6 million cubic metres of natural gas through Ukraine to Europe today, compared with Sunday's volume of 39.3 million cubic metres.

The TTF gas contract fell to its low for the year on 23 February, when it dipped to just above 24 euros per MWh. It is now trading more than 70 percent higher. Since 26 July, natural gas prices in Europe have risen by approximately 23 percent. In addition to the war between Russia and Ukraine, rising tensions in the Middle East have also contributed to the increase.

Despite these factors, European gas storage facilities are sufficiently full, according to experts. They are currently more than 86 percent full and are approaching their target level. They should be 90 percent full by 1 November.