Gas prices leapt by approximately a third on Monday as buyers adjusted to news that Russia’s largest gas supply pipeline will remain shut indefinitely, sparking further shortage and rationing fears.
Nord Stream, which runs under the Baltic Sea to Germany, used to supply roughly a third of the gas Russia exported to Europe, although it was operating at 20% of capacity prior to flows being stopped last week for maintenance.
Operator Gazprom said over the weekend that a leak in the pipeline equipment was the reason it would stay closed beyond last week’s three-day closure.
UK benchmark gas prices surged by 37% to reach highs of 560p per therm at one point but eased lower in the afternoon.
That was, however, still approximately 10 times higher than the long-term average before the crisis began.
Europe blamed Russia for using energy supplies as a weapon in response to Western sanctions but said stocks had been building up significantly in recent weeks.
Over the weekend, the BBC reported that Germany's gas stocks were at 84% capacity, up from 55% only a few weeks ago.
UK gas storage stood at about 1.5bn metres cubed (m3) in August, according to The Institution of Gas Engineers & Managers.
Last month, British Gas owner Centrica PLC (LSE:CNA) was reportedly told to restart operations at its Rough field, which has the potential to more than double the UK’s capacity.
It could provide additional storage of 800mln m3 this winter and up to 1.7bn m3 for next year’s coldest months, UK regulator Ofgem predicted, equal to about ten days demand during winter.