FX.co ★ The cost of gas in Europe falls, but the pressure does not subside

The cost of gas in Europe began to fall sharply after taking off on Monday. So, on Tuesday, September 6, the price of blue fuel fell by about 12% and by the time this material is being prepared, it is below $2,220 per 1,000 cubic meters.

The market may obviously breathe out after the big news about the complete halt of gas supplies from Russia to Europe via the Nord Stream pipeline, as fresh data on Europe's buildup of gas reserves gave the region hope to get through the coming winter safely. Thus, the filling rate of European storage facilities as of September 4 increased significantly, the overall level of occupancy has already reached more than 81.9%. Almost 90 billion cubic meters of gas have already been pumped into the underground storage facilities of the EU countries.

Ahead it became known that Gazprom completely stopped the pumping of gas to Europe through the Nord Stream pipeline for an indefinite period, explaining this decision by identified technical malfunctions. True, Siemens Energy itself did not see a technical reason for stopping the operation of the gas pipeline. Identified leaks, according to the company's management, usually do not affect the operation of the turbine and may well be eliminated on the spot.

Initially, it was announced that the operation of Nord Stream would be suspended for only three days to repair the only working gas pumping unit at the Portovaya compressor station. Gas transit was completely stopped on August 31 and was supposed to resume on September 2.

The downtime of Nord Stream deprives Europe of up to 33 million cubic meters per day, or approximately 1 billion cubic meters of gas per month. These losses add up to the previous reduction in the supply of raw materials from Russia via Nord Stream and other routes, by at least 8-9 billion cubic meters per month.

Amid such news, October futures on the TTF hub in the Netherlands jumped on the charts by 30% on September 5, almost reaching the level of $2,900 per 1,000 cubic meters.

The high level of filling of gas storages is not a sufficient reason for a strong decline in exchange prices for gas, although today it forms some retreat from recent peak values. Obviously, in the event of a severe cooling in the region this winter, much more blue fuel for heating residential and non-residential premises in Europe may be required. That is why gas quotes will continue to be volatile.

The news that the European Commission has developed two price ceilings for Russian gas may also contribute to lower gas prices today.

Meanwhile, Turkish President Recep Tayyip Erdogan expressed an interesting opinion about this whole story, speaking at a press conference. He stated that the gas crisis in Europe is a consequence of sanctions and the attitude of the European Union towards Russia. According to Erdogan, it was Europe's attitude towards the Russian president and the application of sanctions that caused the latter's response, which formed the current difficult situation in the region ahead of winter. The Turkish leader also suggested that very serious problems await Europe in the coming cold months.