The summer heatwaves are pushing up the price of liquid fossil gas in Europe, which has already risen by over 40 per cent since February.
The development risks pushing up the prices of Swedish electricity bills – although many are counting on a downward pressure on gas prices going forward.
The futures contract for deliveries of fossil gas next month is rising 1.6 per cent to 34.64 euros per megawatt-hour on the commodity exchange in Amsterdam in Wednesday's trading.
Besides the increased demand for gas for cooling in countries such as the USA, Japan, and South Korea during the summer heat, higher freight prices across the Atlantic and the fact that many tankers are avoiding the Red Sea due to the risk of attacks from the Iran-backed Houthi militia are contributing to the upward pressure on gas prices. This is in addition to production disruptions in Norway.
New sanctions against Russian gas are a risk factor for further price increases.
Europe, however, entered the summer season in April with unusually large gas reserves after the heating season. And although the replenishment with new gas deliveries is currently unusually limited, this is not expected to threaten the goal of having the gas reserves in Europe fully replenished again by October.
The price of liquid fossil gas on the commodity market in Amsterdam was, under 2022 – in the wake of curtailed Russian deliveries – up to almost 340 euros per megawatt-hour. This can be compared to this year's price peak of 36 euros.
