The price of natural gas surged again in Europe on Wednesday after a delay in the approval process for a major new pipeline from Russia exacerbated worries about whether the continent will have enough gas this winter, according to Reuters.
Germany’s energy regulator suspended the process on Tuesday for bringing the Nord Stream 2 pipeline online, dimming hopes that it will provide any significant gas supplies in the coming months and sending jitters through energy markets.
The price of gas next month in the Netherlands, which is considered to be a benchmark for Europe, jumped almost 8% on Wednesday to hit 101.30 euros per megawatt-hour (MWh), its highest since October 18.
„The timeline for the start of the pipe now appears longer than what we initially expected,” analysts at Goldman Sachs wrote in a note, adding that they now expected it to be up and running only in February next year.
The Dutch contract for gas in January leapt 7.8% to 101.61 euros per MWh on Wednesday while the British wholesale gas price contract for the first three months of 2022 surged almost 12% to 2.45 pounds per therm.
European governments are scrambling to soften the blow for consumers and businesses alike with emergency measures such as price caps and subsidies. One of the world’s biggest energy traders, Trafigura, also warned on Tuesday that Europe could face power outages this winter due to low supplies.
Higher energy prices in Europe and around the world are already feeding through to inflation rates, which may in turn push policymakers to raise interest rates sooner than expected.
Data published on Wednesday showed inflation rates in both the European Union and Britain jumped above 4% in October, more than double central bank targets, with gas prices paid by British consumers, for example, sky-rocketing 28%.