European natural gas prices have surpassed 45 euros per megawatt-hour (approximately 500 dollars per thousand cubic meters) at the start of trading, reaching their highest level this year.
According to the Wall Street Journal, the price increase is attributed to expectations that cold weather will boost demand and accelerate withdrawals from storage facilities.
Changes in the volume of Russian gas transit through UkraineThe transit of Russian gas through Ukraine to Europe over the years is illustrated in the infographic. Ukraine does not plan to extend the contract after it expires in 2024.Currently, storage facilities in EU countries are 92.6% full, with net withdrawals exceeding 5 terawatt-hours.
The Financial Times links the price surge to warnings about potential supply disruptions from Russia.
The increase followed a warning from the Austrian company OMV on Wednesday evening about a "potential cessation of gas supplies" from Russia after it won 230 million euros in an arbitration dispute with Gazprom.
OMV stated that it would "offset" this amount against its invoices under the contract with Gazprom, which could lead to "deterioration of contractual relations," according to the company.
It is important to note that Ukraine does not plan to extend the transit agreement with Russia for gas upon its expiration at the end of 2024.
At the same time, Ukraine is negotiating gas supplies from Azerbaijan to the European Union to maintain its role as a transit country and assist its western neighbors in ensuring energy security.