TTF soars as Russia-Ukraine crisis deepens
European futures contracts for natural gas soared on January 24, amid heightened concerns of a Russian military incursion into Ukraine.
After spiking in late December, European gas prices eased back this month on the arrival of warmer weather and a surge in LNG imports. But at the same time, escalating tensions between Moscow and Kyiv have led to fears of a disruption in Russian gas transit via Ukraine, placing upwards pressure on prices.
The February contract at the Dutch TTF hub was up 17% as of 13:45 GMT, trading at €92.4 ($104)/MWh. The surge came after the US and UK governments announced on January 24 they were withdrawing some staff and their families from their embassies in Kyiv because of the risk of Russian invasion.
Meanwhile, Gazprom cut its exports to countries outside the former Soviet Union by more than 40% in the first half of this month. Between January 1 and 22, exit gas flow from Ukraine has averaged only 45.1mn m3/day, compared with the 110mn m3/d of capacity Russia pays to use under its ship-or-pay contract with Ukraine.