In the gas market, long term prices are being driven by fears about the consequences of the sanctions that Russia and the world are imposing on one another. Traders worry that the gas supply from Russia to European countries may be at risk.
This situation ensures gas price fluctuations. The short-term rates barely change, because supply and demand are in balance. Last Thursday, TTF posted a trading price of € 0.165 per cubic metre. The contract price in 2015 is € 0.247 per cubic metre. That is more than a Euro per cubic metre more than last week.
Market analyst Remco Wiegmink believes that the gas supply will hardly be affected by the sanctions, because gas is too important for both parties: Europe needs Russian gas and Russia needs revenue. Only in the autumn are problems likely to arise if the payment dispute between Ukraine and Gazprom still stands. In practice, Gazprom already supplies no more gas to Ukraine, but the country can live on its gas reserves until September or October. Gazprom still goes through Ukraine to bring gas to other markets. Ukraine will possibly close this route in order to force the Russian gas company into a settlement.
Electricity rates respond in the wake of the gas price and coal prices are also affected by the sanctions. Coal and gas are the fuels needed by energy plants. The daily electricity market prices are structurally low and do not change much. In contrast, long-term prices are mounting up. On Thursday, the contract price in 2015 was € 45 per MWh; that is € 2 more than last week.
For the weekend, oil prices already dropped by an average of $ 2 to around $ 105 per barrel (159 litres) of North Sea oil. This week, oil prices continued to hover around this price level. That is remarkably low considering the tension around Russia. That the oil price does not respond to these political tensions is mainly due to the normal supply and limited demand. Stocks in the United States are large and the seasonality of demand for oil is low. Normally, oil demand in the summer is quite large because of the increase in holiday traffic on European roads.
Source: Nife.nl