2023-08-09 17:03:31
European natural gas prices jumped, on Wednesday, with expectations of an increase in demand in light of European companies’ tendency to store large quantities of gas in Ukrainian storages, due to the availability of storage capacity and the decline in storage prices, despite the war.
Dutch natural gas futures for September delivery rose 40 percent to 43.385 euros per megawatt-hour, the biggest daily gain since March 2022, before paring some of those gains.
And at 16:55 GMT, Dutch natural gas futures rose by 27.2 percent, at 39.50 euros per megawatt-hour.
After the start of the Russian-Ukrainian war in February of last year, the European Union sought to store gas at high levels, to compensate for the decline in Russian supplies, especially during the winter months when demand peaks.
The conglomerate is expected to achieve the target of filling storage facilities by 90 percent by November 1.
Traders said that in addition to stockpiling in areas of the European Union, there was a commercial rationale behind stockpiling in Ukraine, which was to take advantage of cheaper prices now compared to forward deliveries.
Ukrainian facilities provide an additional 10 billion cubic meters of storage space and have a so-called bonded warehouse system to attract foreign customers, with gas stored there exempted from customs duties for three years, allowing it to be easily re-imported into the EU.
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