Natural gas prices in Europe explode to all-time highs as major Russian flow stops
Natural gas prices in Europe exploded on Tuesday, December 21, 2021, after a major pipeline that brings Russian gas to Europe slowed output over the past couple of days and completely stopped delivering on Tuesday. This combined with record-high prices of electricity after France closed 4 of its largest nuclear reactors last week, low wind energy output, and cold weather to further deteriorate Europe's energy stability ahead of very cold Christmas and New Year.
On Saturday, December 18, gas flow at the Mallnow metering point on the German-Polish border sharply dropped from around 13 500 000 kWh/h to 2 250 000 kWh/h and to 1 800 000 kWh/h on December 19. The flow further dropped to 1 634 206 on December 20 until it completely stopped early December 21.1
The westward flow was still 0 as of 08:30 UTC on December 22.
As a result, the front-month wholesale Dutch gas price (European benchmark) rose to all-time high of 180.27 EUR per MWh on December 21. On July 5, 2021, it was 37.95 EUR per MWh and on October 5 116.8 EUR per MWh.
To put these prices in perspective, take a look at numerical and percentage data for 2021 (first two graphs) and all-time data (graphs 3 and 4).
"Europe has very little storage buffer this winter and it's balance is therefore a lot more dependent on imports than in previous years," James Waddell, head of European gas at Energy Aspects, said.2
"Additionally, Gazprom has traditionally shipped around 20% of its supply to Europe through Poland, but these flows have been inconsistent this year and driving up uncertainty about how much gas Europe will actually receive from Russia."
EUROPEAN ENERGY CRISIS (2): Shot-term power prices remain above €350-€400 per MWh across much of Europe for a 3rd day. Winter electricity prices have risen to astonishingly high levels. France is simply crazy: January above €700 per MWh, and February at nearly €900 per MWh.
— Javier Blas (@JavierBlas) December 21, 2021
As a result, the Winter 22 vs Summer 23 spread continues to balloon further and further. Measured by the March 23 (F3) vs April 23 (H3), the spread has widened now to almost €75 per MWh. The March-April spread is often known as the widow-maker — now more than ever. pic.twitter.com/rknI77v05a
— Javier Blas (@JavierBlas) December 21, 2021
EUROPE's gas inventories are depleting rapidly despite record high prices and temperatures that have been milder than normal for the time of year: pic.twitter.com/VCSeglQxBW
— John Kemp (@JKempEnergy) December 21, 2021
On Monday, December 20, European electricity prices also surged to record highs after France announced the closure of four of its largest nuclear reactors.3
To meet the rising energy demand, French power giant EDF restarted fossil fuel generators and the same is hapening with some other producers.
1 Mallnow metering point entry/exit data accessed December 22 – GasCade
2 European gas prices hit record as Russian flows via Yamal reverse – Reuters
3 Electricity prices in Europe surge to record highs – The Watchers
Featured image credit: tradingeconomics
If you value what we do here, create your ad-free account and support our journalism.
Your support makes a difference
Dear valued reader,
We hope that our website has been a valuable resource for you.
The reality is that it takes a lot of time, effort, and resources to maintain and grow this website. We rely on the support of readers like you to keep providing high-quality content.
If you have found our website to be helpful, please consider making a contribution to help us continue to bring you the information you need. Your support means the world to us and helps us to keep doing what we love.
Support us by choosing your support level – Silver, Gold or Platinum. Other support options include Patreon pledges and sending us a one-off payment using PayPal.
Thank you for your consideration. Your support is greatly appreciated.
Commenting rules and guidelines
We value the thoughts and opinions of our readers and welcome healthy discussions on our website. In order to maintain a respectful and positive community, we ask that all commenters follow these rules:
We reserve the right to remove any comments that violate these rules. By commenting on our website, you agree to abide by these guidelines. Thank you for helping to create a positive and welcoming environment for all.
European members have decided not to be beholden to Russia for fuel/energy. There might be corruption from individual government officials – but definitely among the profiteering private energy providers. There are currently many global supply/demand problems that unfortunately are hurting the poor worst. Even the emerging superpower China is enduring an unprecedented energy shortage. The transition to new energy technologies is incomplete, but once we stop using fossil fuels this won’t be an issue. So many kooks in the comments section. Such a shame.
“Stop using fossil fuels …”
Are you crazy or bought into the 90% population reduction?
Notwithstanding what the MSM and euro politicians falsely claim, Germany is selling the gas from Gasprom (who are honoring their written contracts) to Poland at a huge profit, bypassing the German consumers who should be rioting in the streets (or is it too cold?)
Isn’t Socialism (& SLAVERY) just so WONDERFUL?! This is what happens when a population sits on their azz, and lets govt ‘take care of them’ (while they STEAL MASSIVE amounts of $$$, that they call ‘taxes’), and the population has NO CLUE what is going on around them (their CRIMINAL/CORRUPT governments)!!! This is what happens to ZOMBIES! (*hint* *hint*…..it’s ALL BY DESIGN/ENGINEERED by their criminal politicians!!)
Why is socialism so popular? It’s easy. It’s all free. You just take it from the person who is a little more successful.
However, it is weird that socialism tend to benefit the banks & big tech more than the average voter.
one of the least socialist countries in world is china.
they don’t have a social security system
A few years past there didn’t seem to be this problem. However, things change. But now we don’t have to worry about mean tweets.