European Gas Prices Surge Amid Concerns Over Russian Supply

European gas prices surged to their highest levels since January, with TTF prices rising by 4.2% to nearly €34.39 per megawatt-hour.

This spike follows a statement from OMV, an Austrian energy firm, which highlighted the potential disruption in Russian gas supplies to Austria. A recent court ruling could hinder payments to Gazprom for the natural gas already delivered, although the actual implementation of this decision remains unclear.

The affected supply amounts to 6 billion cubic meters each year, which Gazprom has been supplying to OMV through a long-term contract for delivery to Austria.

Austria’s energy landscape is significantly dependent on Russian gas, as 93% of its gas imports in March came from Russia. A cessation of these supplies could create localized market constraints, but it is anticipated that Europe as a whole would manage the situation effectively.

In light of these market developments, investment funds have revised their strategies. As of May 17, they decreased their net long positions in TTF by 11.66 million contracts, bringing the total down to 91.55 million contracts. This marks the first reduction since early April and reflects the market’s response to a variety of factors impacting the energy sector.