Is there a limit to the gas panic in Europe?

 Is there a limit to the gas panic in Europe?

With the opening of trading on the spot markets in Europe today, the gas panic continued, the prices for gas supplies have been renewing the record for several weeks.

During the morning trading on September 13, the gas price reached $740 per 1,000 cubic meters, according to the ICE Stock Exchange.

The cost of the October futures contract for the TTF hub in the Netherlands reached $740.003 per 1,000 cubic meters.

At the end of last week the trading ended with a gas price exceeding $710.

As Igor Yushkov, leading analyst of the National Energy Security Fund, lecturer at the Financial University under the Government of the Russian Federation, noted in an interview with Vestnik Kavkaza, in the current situation it is difficult to predict what levels the prices of gas in the European spot markets will reach, since it's influenced by extra-regional factor.

"Everything will depend on what the situation in the Asian markets will be. The fact is that the fundamental factor for the constant growth of gas prices in Europe is even higher prices in Asia. LNG suppliers who want to earn more are now sending cargo to Asia, where the consumption volumes are especially active," he said.

“Because of this, the Europeans didn't pump sufficient volumes of gas into underground storage facilities, their reserves are noticeably less than usual before the start of the heating season. Therefore, nervousness has been prevailing, and the closer we are to winter, the more it will grow. They hoped that the summer season would end and less energy would be spent on air conditioning, gas consumption would drop, but so far this is not happening," the expert stated.

At the same time, the rise in prices may stop quite soon - with the launch of Nord Stream-2. "If it is launched, then additional volumes of pipeline gas supplies to Europe will help prices move down. In the spot markets, the price may well fall to $500 per 1,000 cubic meters. The price dynamics will depend on the format in which it is allowed to be used in the EU," he pointed out.