Problems with the restoration of full operation of the Nord Stream pipeline continue to put pressure on gas futures prices in Europe, and this factor remains the key reason for the increase in gas prices.

Exchange gas prices in Europe began last week near $2,100 per thousand cubic meters and rose gradually. This week, the growth accelerated: Monday prices were over $2,400 per thousand cubic meters for the first time since early March, and at the opening of trading on Tuesday they were over the $2,600 mark.

Why do gas prices keep going up? 

Why do gas prices keep going up? Last week, gas prices in the EU started going up again. It was caused by Gazprom’s statement that anti-Russian sanctions hamper resolution of the situation with transportation and repair of Siemens engines for the Nord Stream pipeline.

The analysts also singled out additional price growth factors. Intensification of upward gas price dynamics might have been provoked by a stoppage of annual preventive maintenance of some capacities of Norwegian gas field Troll and gas treatment unit Kollsnes from August 13 to the end of the month. This led to a fall in production capacity of 20 million cubic meters of gas during this period.

It is worth noting the atypically high temperatures in Europe, which lead, on the one hand, to a rise in demand for electricity, for air conditioning, and, on the other hand, to a reduction in hydropower generation amid droughts in some regions, notably in France.

Moreover, according to the association WindEurope, wind generation in the European Union remains below the norm, which is usually 11-20% in summer. On August 15, the share of wind power generation was 9.5% of the total. This factor could also increase demand for gas.

We previously reported that Oil prices fell again at the start of Monday’s trading. 

Natural gas prices on the London Stock Exchange ICE record rose to more than $2,600 per thousand cubic meters for the first time since early March, according to the site.

At the time of publication, the September futures on the Dutch TTF hub were worth 250.395 euros per kilowatt-hour, or $2,693.17 per thousand cubic meters.

The sharp rise in the cost of gas in Europe on the exchanges is because there is a full shortage of this: gas, supplies from Russia have been reduced, LNG is expensive on the international market and it can not fully replace the supply of Russian gas, expensive petroleum products and coal.

The increase over the last 24 hours was 13.75 percent. The rise in gas prices is due to the abnormal drought in Europe and the interruption of Russian fuel supplies. The latter are now running at 20 percent of standard capacity.

We previously reported that Saudi Aramco sees no strong impact on its position in Asia.

Oil is getting cheaper. Oil quotes are falling Tuesday night due to concerns about slowing global economic growth and weakening demand for fuel.

It became known the day before that growth in retail sales and industrial production in China in July was weaker than analysts’ forecasts.

Retail sales rose by 2.7% year-on-year instead of the expected 5% growth. China’s industrial production growth slowed to 3.8% last month from 3.9% in June, while analysts’ consensus forecast was 4.6%.

Is oil getting cheaper? Why It’s Getting Cheaper

To support China’s economy, the People’s Bank of China injected 400 billion yuan (nearly $60 billion) into the financial system as part of its medium-term lending (MLF) program and also cut the rate on one-year MLF loans by 10 basis points, to 2.75% per year.

“This unexpected decision gave the impression that the central bank was concerned about the scale of the weakening economy,” wrote Commerzbank (ETR:CBKG) analyst Carsten Fritsch. — In our view, problems in the real estate sector, combined with a zero-tolerance coronavirus strategy, are likely to continue to weigh on the economy in the short to medium term, meaning it will be a persistent negative factor for oil prices.”

October Brent futures on the ICE Futures Exchange in London had fallen $1.10 (1.16%) to $94.00 per barrel by 5:56pm Moscow time.

At the same time, quotations for WTI futures for September at NYMEX decreased by $0.98 (1.10%) — to $88.43 per barrel.

We previously reported that oil prices have stepped up their fall.