ZeroHedge recently wrote about Europe’s soaring, record gas prices as Russian nat gas supplies have been suspiciously low, amid growing concerns about Europe’s inventory levels as the winter approaches.
The price uptrend was finally broken one week ago – if only for the time being – when Dutch natural gas futures prices (TTF) fell by 10% after data suggested Nord Stream 2 started flowing. But that data turned out to be incorrect, and prices quickly rebounded recovered.
But after that the European natural gas prices plunged once again, and again it was on the prospect of more Russian supply, after Gazprom said it’s likely to deliver 5.6bcm of gas this year via the Nord Stream 2 pipeline.
And if the gas doesn’t start flowing for real, we expect even higher highs. This could be challenging because hurdles remain before Nord Stream 2 can start.
The first line of NS2 might be getting tested. But it is too much of a wishful thinking on part of the market to believe that the line is ready for commercial operations.
Russia, presented a its own professional view, assuming the pipeline will reach utilization of 70% from the design capacity in December and its gas-in will be gradual, Gazprom probably anticipates full-fledged supplies can start approximately in October 2021.
However, before carrying the first gas flows to Europe, Nord Stream 2 needs to obtain insurance and certification, a task made difficult by U.S. sanctions that restrict providing these services to the project.
If Russia is indeed preparing to ship much-needed product to Europe, then the price of natural gas could plummet if the total price mechanism was in hand of the Western cartels.
Oil Price.com / ABC Flash Point News 2021.