The Kremlin’s gas racket faces failure

The “pipeline solo” that Gazprom has been performing since the start of the Ukrainian war is making less and less of an impression on the European gas market, notes the Moscow Times.

Despite the second shutdown of Nord Stream since the beginning of the summer, the suspension of gas to France and a new reduction in supplies to Italy, despite the deliberate flaring of huge quantities of gas by Gazprom near the border with Finland, the price of gas on the London Stock Exchange ICE falls quickly.

After plunging 17% on Monday and another 6.5% on Tuesday, gas futures for October delivery tumbled another 13% in Wednesday’s trading and immediately fell to $2,450 per thousand cubic meters.

In less than three days, gas has lost a third of its value, or more than $1,000 per thousand cubic meters, which has dragged down electricity prices in the major economies of the eurozone, it says “Because“.

In Germany, the price per megawatt hour on the wholesale market for the year fell from an all-time high of 1,050 euros on Friday to 545 euros on Wednesday.

Russian energy blackmail has failed, Hertie School professor Lion Hurt says: “Nord Stream is shut down, but the market doesn’t care and prices are collapsing.”

The reason is that gas storage in Europe is filling up ahead of schedule, according to Wei Xun, senior analyst at Rystad Energy.

The European Commission’s plan called for 80% of facilities to be filled by October 1, but for the EU as a whole, this goal was already reached by the end of August.

At the same time, in France, which supplies 20% of its gas needs to Gazprom, storage facilities are 90% full.

Russia’s refusal to supply France’s Engie – the country’s biggest user of Russian gas – is “using energy as a weapon”, Energy Transformation Minister Agnes Panier-Ryunasse said on Wednesday.

But “France has been preparing for such a scenario since spring,” she stressed, adding that LNG (underground gas storage) facilities would be filled to maximum capacity within two weeks.

European countries are approaching physical gas storage limits, says Ion Treacy, publisher of investment newsletter Fuller Treacy Money.

“To achieve this, gas was bought without regard to prices. They have grown up with the assumption that Europe is facing an unprecedented energy crisis, Treacy says.

“But it may not be unprecedented, just a crisis. And that means we’re coming to the end of a period of indiscriminate buying, physical storage constraints, which means there’s just not going to be anywhere to pump gas.”


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