Natural gas price remains steady

Considering the potential disruption the gas markets could have faced if Russian troops escalated the situation in Ukraine, the natural gas market has been exceptionally calm.

The winter Europe has just had was one of the mildest for seven years and, at the moment, natural gas supplies in the EU are at a maximum. With reserves at their limit, it would roughly give the EU nations a forty-day buffer if the taps were switched off from Russia; an event that is looking less and less likely. Even with that being the case, the markets have stepped up their acquisition of Russian gas over the week as a precursor to a turn for the worse. With the Crimean parliament electing to join Russia, and the Crimea-wide public vote set to happen, it shows that this is far from an aggressive takeover.

The spot price of natural gas is currently some 14.5% off its four-month highs and with spring around the corner demand will inevitably begin to reduce. The possibility of over-supply to the market is considerable, and the drift in the spot price likely; however, the possibility of military action in the East would give good grounds for implementing guaranteed stops. 

Natural gas chart

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