European gas prices rise further as Russia cuts supplies

Russia cut supplies through Nord Stream, the largest link to the continent, to less than half of its usual volumes, sending benchmark futures to 8%

Dutch front-month gas futures, the European benchmark, were 7.6% higher (€129.49 per megawatt-hour) this morning.

Natural gas prices in Europe jumped after Russia cut supplies through the largest link to the continent to less than half of its usual volumes, with benchmark futures surging 8%

German Economy Minister Robert Habeck said Wednesday that he believes the reductions through the Nord Stream were “politically motivated” and not due to technical issues as Gazprom PJSC stated. Russia is seeking to unsettle markets and drive prices higher, he said. 

Chancellor Olaf Scholz is scheduled to visit Kyiv on Thursday along with other European leaders.

The cuts announced on Wednesday follow reductions the previous day after Gazprom cited issues with repairs of turbines produced by Siemens. 

European nations have for several months feared Russian gas supply cuts in retaliation for sanctions aimed at Moscow for its invasion of Ukraine in February. 

Russian gas transit via Ukraine has been curtailed since May 11, after one of two key cross-border points was put out of service amid fighting in the eastern part of the country.

Russia’s daily gas exports to its key foreign clients so far in June have tumbled to the lowest since at least 2014.

Dutch front-month gas futures, the European benchmark, were 7.6% higher at €129.49 euros per megawatt-hour by 8:10am in Amsterdam. They rose 44% in the previous two sessions.

• Bloomberg