European gas futures continued their upward trend on Thursday, even after Russia pledged to provide supplies as needed by the continent. Russian President Vladimir Putin stated on Wednesday that the largest gas supplier to Europe is intensifying deliveries in line with customer demands and is "ready to discuss any additional steps" to stabilize the market, blaming flawed policies for the energy crisis in the region rather than a supply shortage.
European gas prices rose despite Putin's reassuring statements. The nearest futures contract in the Netherlands rose by 10% on Thursday, surpassing 100 euros ($116) per megawatt-hour for the first time since last Friday before retreating to 98.50 euros at 2:46 PM Amsterdam time. The corresponding contract in the UK also rose by nearly 10% earlier before falling to 249.54 pence per thermal unit, a rise of about 6%.
TASS news agency reported that Deputy Prime Minister Alexander Novak stated that European buyers have not yet requested the Russian government to increase gas supplies.
**Renewal of Partnership**
Engie EnergyScan wrote in a report: "The market seems to believe that the historical partnership renewal sought by Putin from the Europeans, clarifying the role of gas in their energy mix, may take time to materialize and resolve their short-term problem." It added that gas in Europe is likely supported by rising coal prices in Asia.
Daily contracts in the UK rose by 11.6% due to concerns that a decline in electricity generation from wind power could exacerbate supply shortages in gas markets. Wind power generation capacity in the UK is expected to fall to 1,384 megawatts at 7 PM local time on Friday, the lowest level in over four weeks.
Inspired Energy stated in a note that the decline in wind power generation is likely to increase emissions in the UK and raise prices in electricity and natural gas markets. While next month's delivery prices are high, 2022 shipping contracts are trading at less than half or a third of that price, according to Harry Huang, head of gas and electricity trading at PetroChina International, during a virtual conference on Thursday, adding, "This storm will continue."
Melissa Lindsey, CEO of the liquefied natural gas brokerage Emstream, also mentioned in the conference that the continued rise in prices results from last winter's increase in natural gas prices. She said, "People's willingness to pay high prices currently for winter shipments is due to what they experienced last year."
