Gas prices soar amid Russia-Ukraine tensions
European gas prices have surged in recent days, amid escalating tensions between Russia and Ukraine that have led the US to threaten Moscow with "extreme" sanctions if it invades its eastern neighbour.
Ukraine's government claims the number of Russian troops at its border has reached 120,000, and has said Moscow could be planning a military offensive in late January. US president Joe Biden and his Russian counterpart Vladimir Putin spoke for around two hours by videoconference on December 7 in an effort to defuse the situation.
Biden has said he warned Putin that there would be "economic consequences like none he's ever seen." Putin told Biden that Ukraine's bid to join NATO must be denied in return for assurances that Russian troops would not enter the country. Biden said he did not accept Putin's "red lines" on Ukraine, including denying the country entrance into NATO.
Shortly after the call, US undersecretary of state for political affairs, Victoria Nuland, told the Senate Foreign Relations Committee that the administration was preparing for various responses against Russia including, at the most extreme, military action.
“This time, the intent is to make clear that the initial sanctions in response to any further aggressive moves in Ukraine will be extremely significant and isolating for Russia and for Russian business and for the Russian people," she said.
But Biden later said "the idea that the US is going to unilaterally use force to confront Russia invading Ukraine is not on the cards right now." His administration has suggested that economic sanctions against Russia could include further measures against the Nord Stream 2 pipeline.
The January gas delivery contract at the Dutch TTF hub is up 2.25% as of GMT at €102.7 ($116)/MWh, according to ICE data. The contract started the week on December 6 at €89.93/MWh, but soared to €95.88 on December 7 and €101.5 on December 8, before dipping slightly to €100.45 on December 9.
European gas prices have risen to unprecedented heights over recent months amid a sharp rebound in demand that supply has not matched. Price growth has been particularly pronounced in recent weeks, after Europe's main gas supplier Gazprom exported a record low amount of gas to the continent in November, despite earlier expectations that it would ramp up supplies.
Storage levels are also unusually low for this time of year, with facilities across the EU and the UK only 64.3% full on December 10, according to data published by Gas Infrastructure Europe.