UK, Europe gas prices plunge a day after record surge

British and Dutch gas plunged on Friday, just a day after posting historic gains on account of the Russian invasion of Ukraine.

In the Dutch gas market – a closely watched measure for European prices – the front-month contract fell by 27.50 euros to 108.50 euros per megawatt hour (MWh) by 0816 GMT, having risen to an intraday high of around 140 euros/MWh on Thursday.

The price for April was down 5.50 euros at 110.50 euros/MWh, while the May contract was down 16.50 euros at 107.50 euros/MWh.

In the UK, the weekend gas price was down 15.00 pence at 261.00 pence per therm, while the summer 2020 contract slumped by 70.00 pence to 260.00 p/therm.

On Thursday, the price of British gas for next-day delivery jumped 53 percent to 326p per therm as the Russian invasion stoked fears of a major disruption to global energy supplies. Similarly, Dutch futures had also jumped 57 percent on contracts for delivery in March.

In the United States, the March New York Mercantile exchange natural gas futures contract approached $5.00, up more than 30 cents early Thursday, before giving back the gains. The contract settled at $4.568, down 5.5 cents on the day.

According to US Global Investors Inc. head trader Mike Matousek, the war in Ukraine threatens the flow of gas to Europe at a time when natural gas consumption is near peak levels during the late-season throes of winter. “This presents the potential for major energy supply headwinds,” Matousek told NGI.

Gas traders in Europe positioned the plunge on Friday to a course correction after the massive hike on Thursday, but predicted that the market will continue to be extremely volatile.