European Gas Prices Surge as Ukraine Crisis Threatens Supply

Natural gas prices from the U.K. to Germany jumped amid escalating tension in Ukraine, the main transit route of the fuel from Russia to consumers in the west.

U.K. gas for next-month delivery climbed as much as 10 percent, the biggest gain since September 2011, on the ICE Futures Europe exchange in London. Dutch gas for April increased as much as 10 percent while the German NetConnect contract rose 8.1 percent.

The standoff over Ukraine intensified over the weekend as the former Soviet state put its forces on combat readiness and Russia’s President Vladimir Putin threatened to invade. Wholesale gas costs jumped in January 2009 after Russian supplies via Ukraine halted amid a dispute over prices and transit terms. Europe’s biggest stockpiles of natural gas since at least 2008 are damping the threat of any potential disruptions.

U.K. gas rose as high as 61.95 pence a therm ($10.35 a million British thermal units) before trading at 60 pence at 9:38 a.m. London time. Dutch gas climbed as high as 25.40 euros a megawatt-hour while the German NetConnect contract increased to 25.60 euros a megawatt-hour.

U.K. gas stockpiles were 55 percent full on March 2, the highest for the time of year since at least 2008, according to data from Gas Infrastructure Europe. Inventories in Germany were 60 percent full, also the most since at least 2008, while Italian stores were at 51 percent, the highest since 2011.

Natural gas transit from Russia to Europe via Ukraine hasn’t been interrupted, an official at Ukrainian national pipeline manager Ukrtransgaz said today by phone from Kiev, asking not to be identified in line with policy. Russian gas imports into Ukraine from Russia were at 45 million cubic meters a day as of March 1, up from about 20 million a year ago, the official said.