Date: 25 June 2021

Russia Raises Gas Price for Europe

Russian gas giant Gazprom decided to raise the average gas export price for European countries. The company’s managers expect it to reach $240 this year, which is way more than what Gazprom and market analysts had forecasted. The decision is driven by the increasing demand for natural gas.


Russia’s Gazprom has raised the average natural gas export price for non-CIS countries to $240 per 1,000 cubic meters in 2021, Renaissance Capital was quoted as saying after the investment bank met Gazprom managers. This is more than what Gazprom Export’s Andrei Zolotov had assumed in late May (“we expect that the price will never drop below $200 a year”). Renaissance Capital had said previously it expected the average gas export price for Europe to be around $216 per 1,000 cubic meters this year. Gazprom added there had been an increase in bids for long-term contracts, a tendency that impairs its ability to boost spot trading volumes. Natural gas prices also rose to $397 at the Dutch-based TTF hub. This year the average price of the day-ahead TTF contract reached $266 per 1,000 cubic meters. At the same time, Gazprom’s 2021 budget plan included an average gas price of $170 per 1,000 cubic meters for exports to what is referred to as “far abroad” countries (so also the European Union). Now more than 80 percent of Gazprom’s trade into Europe base on spots trading with different time bases. What proves best of gas shortages in Europe is the extent to which storages facilities are filled. As of June 22, gas storage facilities were at the lowest in roughly a month, since May 27, as resources cover current consumption. Gazprom’s Europe-based storage facilities are now 45.22 percent full, which is 14.46 percent lower than in the past five years on average (59.68 percent). Analysts from Renaissance Capital also cite some comments from Gazprom managers who had said that gas consumers were increasing consumption based on long-term contracts. So the firm has no longer gas commodities to trade them immediately on the spot market.

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TAGS: economy, USA, Bliski Wschód 

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