Gas prices in Europe could rise 60 percent

Gas prices in Europe could rise 60 percent

 "European spot gas prices have reached $2,500 (per 1,000 cubic metres)," Gazprom said. "Based on conservative estimates, if this trend continues, prices will exceed $4,000 per 1,000 cubic meters this winter." Ukraine has closed one of Gazprom's routes for shipments to Europe.

 The group itself reduced the capacity of the Nord Stream 1 Baltic Sea pipeline to Germany by about 20 percent in a dispute over a gas turbine belonging to German company Siemens Energy, which is responsible for maintenance. Russian state-owned company Gazprom warned European customers about the sharp rise in gas prices in winter. This could increase 60 percent to more than 4,000 dollars (3,923 euros) per 1,000 cubic meters, the company announced in Moscow on Tuesday. 

The reason for this is that exports and production continue to shrink due to western sanctions over the Ukraine war. Overall, Gazprom's gas exports fell 36.2 percent to 78.5 billion cubic meters between January 1 and August 15. At the same time, production fell 13.2 percent to 274.8 billion cubic meters, the company said. In August alone, production has fallen 32.2 percent so far, after 35.8 percent in July, said economist Yevgeny Suvorov at CentroCreditBank. The decline in exports accelerated to 59 percent. 

Dutch wholesale gas prices hit a record high of almost 335 euros per megawatt hour (MWh) in the spring. They have since fallen to around $250, data on Tuesday showed. However, they are still much higher than last year, at around 46 euros per MWh. In Germany and many other European countries, high energy prices fuel inflation. According to experts, Germany's inflation rate could even hit double-digit values   in the fall.

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