Energy: Natural gas price as low as before the Ukraine war

The European natural gas price (TTF, 1-month forward) fell by 3% to EUR 84.5 per MWh yesterday. This is the lowest closing level in more than three months, i.e. before Russia started the war in Ukraine. The price drop came even as Russian natural gas deliveries via pipelines to Europe continued to decline, falling to 2,180 GWh per day, the lowest level since the end of April. This was due to lower deliveries via Ukraine, while deliveries via Nord Stream remained constant. Gas again flowed in the opposite direction from Germany to Poland via the Yamal pipeline.

Since Russia stopped gas deliveries to Poland at the end of April, deliveries from Germany increased significantly. Yesterday, Poland prematurely terminated a gas agreement with Russia that regulated the supply of natural gas via the Yamal pipeline. This agreement would have expired at the end of the year and was not to be extended by the Polish side anyway. The Polish government, however, wants to maintain the use of the Yamal pipeline in the opposite direction. Poland is therefore not completely independent of Russian gas even after the delivery stop, as Germany receives most of its gas from Russia via the Nord Stream Baltic Sea pipeline.

Source: Commerzbank Research, Photo: Fotolia