Rationing fears push European gas prices up for fourth week    

The energy crisis could get worse with only two months to go before the winter heating period begins

Russian shipments via the key Nord Stream 1 pipeline edged lower to around 18% of capacity for about an hour on Friday afternoon, briefly driving prices higher.

European gas prices have notched up a fourth week of gains and electricity rose to a record as the continent braces for an even deeper supply crunch over the winter that could push major economies into recession.

Benchmark gas futures fell slightly on Friday, but were still about 6% higher this week. Russian shipments via the key Nord Stream 1 pipeline edged lower to around 18% of capacity for about an hour on Friday afternoon, briefly driving prices higher. Flows returned to 20% soon after but the market’s reaction reflects the deep set concerns over supply.

Russian gas

The energy crisis crippling Europe could get worse with only about two months to go before the winter heating period officially begins. The region is still heavily dependent on Russian gas to get through the colder months, and any further disruptions to supply may heighten the risk of blackouts and rationing.

“Prices will continue at high levels so long as gas supply from Russia appears to remain tight in the foreseeable future,” said Rystad Energy analyst Lu Ming Pang in a research note.

Still, prices have been kept in check in recent days by Europe’s storage levels recovering to near-normal for the time of year, with increased imports of liquefied natural gas. The purchases, however, are coming at a cost as the liquid fuel becomes more expensive with the continent vying for supplies with Asia. 

• Bloomberg