- European TTF gas prices exceeded 55 euros per megawatt hour today.
- Since the beginning of the week, European TTF gas has risen in price by more than 60%.
- The price of oil is rising sharply and is approaching the $85 per barrel mark.
- The European Euro Stoxx 50 index falls by roughly three and a half percent.
- Europe is entering the crisis with gas reserves at around 30 percent of capacity.
The prices of energy carriers continue to rise due to the escalation of tensions in the Strait of Hormuz and the suspension of supplies of liquefied natural gas (LNG) from Qatar. XTB financial market analyst Matej Bajzík drew attention to this on Tuesday.
“European TTF gas prices have crossed the €55 per megawatt-hour (MWh) mark and are up more than 60% since the start of the week. At the same time, oil has rallied and is attacking the level of $85 (€72.66) per barrel (159 liters). The European stock index Euro Stoxx 50 is losing approximately 3.5% today, and the negative sentiment is also transmitted across the Atlantic, where the main American indices are already around -2% in the premarket. The market is also concerned that the surge in energy prices will translate into higher consumer prices and renew inflationary pressures in the eurozone, pushing interest rates higher,” zoomed in on Bajzík.
The main catalyst for the price increase is the escalation of tensions in the Strait of Hormuz and the suspension of LNG supplies from Qatar following recent incidents. Hormuz is among the world’s most important energy shipping routes, and any restriction on shipping immediately increases the risk premium in both oil and gas prices. Statements that vessels entering the area could be considered legitimate targets also escalated the situation.
At the same time, Europe is entering this situation with low gas reserves, hovering around 30% of capacity. The combination of limited LNG supplies and low inventories is significantly raising concerns about rising energy costs and driving prices higher.
