Global natural gas prices have set a record and reached their highest level since the fall of 2018, Russia-based Kommersant newspaper reported on Thursday with reference to the opinion of analysts, who expect the trend to continue until the end of the year.
As of early April, the average price of one thousand cubic meters of gas at the Dutch TTF gas hub exceeds $250 (€20.35 per megawatt hour). The Dutch TTF trades futures with a delivery date in the fourth quarter of 2021 at €21 per megawatt hour.
Kommersant noted that the main reason for the rise in the gas prices was the active filling of the European underground storage facilities. The filling of the reservoirs reduces the supply in the spot (current) market. Currently, the main European storage facilities are 31% full, up from 29% at the end of February.
From December to February, 69 billion cubic meters of gas were extracted from the European storage facilities, which is 24 billion more than last year. The main reason behind this mass natural gas usage is the colder than expected winters and springs in the continent.
Kommersant also pointed out that the transition of many industrial producers from coal to gas played an important role in the rise of the prices. The transition occurred mainly because of the rise in the price of emission quotas traded on special exchanges. In April, the emission quota for a ton of carbon dioxide is traded at 43 euros.
The Dutch TTF hub is considered as one of the most important natural gas trading hubs in the world. Most of the global traders link their prices for natural gas products, including LNG, to the TTF. Natural gas at the TTF trades in euros per megawatt hour.