European gas prices top $1,200/'000 m3
November futures at the Dutch TTF hub reached €99.99/MWh ($1,200/'000 m3) on October 4, ICE trading data shows, corresponding with a surge in the share price of Russia's Gazprom to a record high.
Gazprom's share price topped 380 rubles on the Moscow Exchange when trading began on October 5. Besides high gas prices, the share price may have been buoyed by the company's announcement the previous day that it had begun filling the Nord Stream 2 pipeline with gas, ahead of technical tests.
Commenting on the update at Nord Stream 2, analysts at VTB Capital (VTBC) warned that the Nord Stream 2 company's certification as an independent operator – a requirement for the pipeline to begin commercial flow – could take until spring 2022. The pipeline should save Gazprom $0.5bn in transport costs next year, according to VTBC, or 1% of the company's EBITDA.
The spike in gas prices in Europe is undermining the continent's post-pandemic recovery, and has also prompted an increase in coal demand, as power generators have switched to the dirtier fuel to cut costs. This in turn has caused a surge in the price of EU carbon allowances.