Gas prices in the UK and Europe were sent higher today after Russia’s national gas supplier decided to cut supply to the continent.
Gazprom said it would cut gas flows through the Nord Stream 1 pipeline to Germany to 20% of capacity this week, sending European markets into a jitter.
Michael Hewson, chief market analyst at financial services firm CMC Markets UK, said: “The wider negative tone for markets, has been primarily driven by yesterday’s news from Gazprom, that it would be reducing gas flows from tomorrow to 20% of capacity, and the consequence of what that is likely to mean for the economic outlook for Europe as we head into the winter months.”
UK gas prices rose to 374p per thm (100,000 British thermal units) today, a 17% increase from 319p on Monday.
Gas prices in the country have risen by more than 124% in a month and 270% in the past year, according to the UK Natural Gas Futures benchmark price.
Natural gas futures in Europe jumped by 23% to €204.5 per megawatt-hour, according to the EU Dutch TTF benchmark, up from €166.41 per MWh on Monday.
Shares in British Gas owner Centrica PLC (LSE:CNA), which is due to post its interim financial results for 2022 tomorrow, edged higher due to rising gas prices.
The British gas company’s shares rose 3% from 87.3p on Monday to 89.8p today, climbing 0.44% by early afternoon.
Centrica is due to release its interim financial results for 2022 tomorrow, after 07:00 on Thursday 28 July 2022.
Earlier this month, analysts at investment bank Credit Suisse said they expected Centrica could lift its dividend to 3.5p per share for the year on the back of its half-yearly results.