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Market Chatter: Europe Faces Surging Gas Prices as it Turns Away From Cheaper Russian Gas

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Europe is suffering from surging gas prices as it continues to buy expensive fuel from the spot market, while shunning cheaper Russian gas, Reuters reported Wednesday, citing Russian spokesperson Dmitry Peskov.

European natural gas prices reached their highest level since late 2022 last week at 75 euros ($87.29) per megawatt-hour, while storage levels dropped to 67% from the previous year's 80%, according to the report.

While oil transit routes from Russia to Europe have mostly closed, Peskov reportedly said that one string of the Nord Stream 2 pipeline remains intact and could be quickly tapped should Europe decide to take Russian gas.

Reuters calculations showed that Europe's imports of Russian pipeline gas dropped to 18 billion cubic meters last year, the lowest since the mid-1970s, from a peak of 180 bcm in 2018 and 2019.

The European Union has passed legislation to end all imports of Russian gas from next year because of Russia's near five-year war on neighbor Ukraine. Ukraine has stepped up attacks on Russian energy infrastructure to reduce Russia's ability to fund the invasion.

The European Commission did not immediately respond to' request for comment.

European Commission President Ursula von der Leyen has repeatedly said that EU countries need to accelerate the pursuit of energy independence by investing more in renewables and embracing electrification.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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