The wholesale price of gas for the European market broke the record on Thursday after the price of the crucial gas futures contract for September delivery rose 6.7 percent to close at €241 per megawatt-hour (MWh) at the Title Transfer Facility virtual trading hub in the Netherlands.
Europe has been dealing with a crisis in energy supply since last fall; however, the situation worsened this spring following the Russian invasion of Ukraine, and natural gas has become too expensive for industrial use and electricity production, Bloomberg reports.
Prices are approximately 11 times higher than usual for this time of year. Costs for European households and businesses are skyrocketing as consumers face the worst inflation in decades.
Limited supplies from Russia, increased demand amid the recovery from the coronavirus pandemic, and a hot, dry summer that has increased the need for cooling are now all exacerbating Europe’s energy crisis. European countries are drawing up plans to save gas before the winter starts, attempting to fill up their gas reservoirs as much as possible and preparing for possible deliveries of energy to consumers on a rationed basis.
Electricity prices are also rising to new highs. The price of a key futures contract for next year’s delivery this week on the European Energy Exchange in Leipzig exceeded €500 per MWh for the first time. It has thus increased by roughly 500 percent over the last year.
