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Gazprom increases transit through Ukraine. Gas price in Europe responds with significant cheapening

Gas in Europe at $882—what has fostered the price reduction. Photo: GTS Operator of Ukraine

Gas in Europe at $882—what has fostered the price reduction. Photo: GTS Operator of Ukraine

Prices on the European gas market have dropped to less than $900 per thousand cubic meters, unprecedented in recent months, aamid Russia's increase in the resource transit through the territory of Ukraine. According to the TSO Eustream, cited by Bloomberg, futures crashed by more than 10% after the gas flow in the Slovak direction increased by 1.8 times to 107.7 million cubic meters per day.

The March futures price for the TTF spot index on the ICE Futures exchange is at around 75.9 euros per 1 kWh, or $882 per thousand cubic meters. Meanwhile, the price has been fluctuating close to $1,100 in recent months.

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Warm weather and the increase in generation from renewable energy sources are playing into the hands of European countries. An equally important factor is that the United States seeks alternative sources of gas supplies for Europe in case of a Russian invasion of Ukraine. Given the current geopolitical situation, the EU is also negotiating with other suppliers (from the US and Qatar to Azerbaijan) on the possibility of emergency supplies.

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