European Gas Rises on Anticipation of Ukraine Transit Expiring

(Bloomberg) -- European natural gas prices rose in anticipation of a halt in Russian flows via Ukraine on New Year’s Day, as a transit agreement between the two nations expires.

Gas for February rose as much as 2.2% on Tuesday. A five-year deal between Moscow and Kyiv to move Russian gas to central Europe is set to lapse when the clock runs out on 2024, with no arrangement yet in place to avert a stop in supplies. Ukrainian President Volodymyr Zelenskiy rejected any deal that would keep flowing Russian gas and financially benefit its war adversary.

Scenarios: Europe Braces for Tense Countdown to Ukraine Gas Flow Halt 

The halt in supplies serving Slovakia and a group of other central European states comes as the region is set to face freezing weather in January. Inventories are also being depleted faster than usual, making it more challenging to reach storage targets for next heating season. 

Ukraine is under mounting pressure from Slovakia to keep the gas flowing, with Prime Minister Robert Fico threatening to cut power supplies to Ukraine if the shipments stop. The Slovak premier in recent days called on the European Commission to urgently address the looming halt, which he said would increase energy prices everywhere in Europe. 

Gas for February delivery in the Netherlands, Europe’s gas benchmark, rose 1.1% to €48.40 a megawatt-hour by 9:43 a.m. in Amsterdam.

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