Gas prices in Europe rose by around 40 percent on Wednesday to over 160 euros per megawatt-hour.
The price of Europe Netherlands TTF 1-month contracts rose 40 percent to 162 euros per megawatt hour on Wednesday. This corresponds to a price of around 1,700 per thousand cubic meters of natural gas.
At the beginning of 2021, gas prices in Europe stood at around 20 euros per megawatt hour. The benchmark price of natural gas has increased by 168 percent since the beginning of September.
As of October 5, the spot natural gas reference price in Turkey was around 2 thousand 517 TL, while the prices were around 2 thousand 100 TL at the beginning of September.
European Commission Energy Chief Kadri Simson said that by revising the natural gas market rules of the union by the end of the year, they aim to reduce the rising costs that reduce competitiveness and erode the economic recovery.
Saxo Bank A/S Commodity Strategist Ole Hansen said: "The increase in natural gas prices shows that the markets are moving with fear."
Capital Economics, on the other hand, in a note shared with its clients, said, “The European gas rally does not seem to be over. Although we expect a decrease in natural gas and coal prices from these peaks, we will see higher price levels in the next year compared to the past.”
Coal prices in Europe at record high
In Europe, the price of coal rose to $275 per ton in November futures contracts, reaching an all-time high.
Along with the increasing demand for electricity generation from coal, coal prices also recorded a sharp rise in September, while the price of carbon permit contracts in Europe had exceeded 65 euros in September with the increase in electricity production from coal.
Generators wishing to generate electricity from coal must purchase emissions permits for each tonne of excess carbon they cause. The increase in production from coal also increased carbon emissions, fueling the demand for carbon permits. This drove the price of carbon permit contracts up significantly.
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