The benchmark European gas prices continue their rally this week, surging to new record highs on Tuesday to an equivalent of $205 a barrel oil, amid a wider energy commodity rally driven by supply concerns ahead of the winter.
The gas price at the Dutch TTF hub, the benchmark gas price for Europe, soared on Tuesday to above 100 euro per MWh for the first time ever, as gas and coal prices rally in Europe and Asia and as nuclear power generation in France fell due to a strike.
The energy crisis continues to worsen, and there is no immediate relief in sight, analysts say.
"Everything looks set for another week of price climbs, as the fiercely nervous sentiment on the market continues due to fears of reduced supply during the winter. The most traded contracts on the important Dutch TTF hub once again climbed to all-time highs, and could easily continue the uptrend today," Energi Danmark said in a note on Tuesday.
According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, the Dutch TTF gas benchmark traded in the morning in Europe up 12 percent on the day at €106.3/MWh, equivalent to $36/MMBtu or $205 per barrel of crude oil.
The market is concerned about energy supply this winter and shrugged off Monday's news from Nord Stream 2 AG, the operator of the controversial Russia-led gas pipeline, which started filling the first string of the pipeline with gas to get ready for the moment that German authorities grant it an operational license.
With an uncertain start of Nord Stream 2, gas prices in Europe continue to surge, also due to forecasts of cold weather in north Europe and lower production of electricity from nuclear generation in France, due to a strike.
"All energy prices - coal, oil, gas, power - are up. There doesn't seem to be any let up to the rallying," a gas trader told Reuters.
By Tsvetana Paraskova for Oilprice.com