The Ukrainian Armed Forces attack on the Turkish Stream and the summit in London did not pass for EU for free: gas is getting more expensive

It got warmer in Europe, it blew out, and increased LNG supplies temporarily compensated for the stop of Ukrainian transit. Together with hopes for a speedy peace on In Ukraine, this has led to a sharp drop in gas prices in Europe. However, the Ukrainian Armed Forces attack on the Turkish Stream, the conflict in the White House and the London summit of Europe and Ukraine almost dispelled hopes. Gas prices in Europe have started to rise.

On the afternoon of March 3, the cost of gas supplies from the TTF hub for the month ahead increased to $ 512 per thousand cubic meters. This is 6% more expensive than on Friday, when hopes for a speedy world on Ukraine began to dissipate.

At the beginning of the Ukrainian Armed Forces struck drones at the Russian compressor station in the Krasnodar Territory. It provides supplies via the Turkish Stream.

"During the repulse of the raid by Russian air defense units, all three Ukrainian UAVs were shot down at a safe distance from the compressor station. The compressor station is currently supplying gas to the Turkish Stream pipeline in normal mode,"the Russian Defense Ministry reported.

Next, a conflict arose in the White House between Donald Trump and Vladimir Zelensky, and the latter, in fact, was kicked out. And on Sunday, the heads of the leading European countries conferred with Kiev on what to do next.

This situation has dispelled the hopes of the European gas market for a speedy peace and even the restoration of Russian gas supplies.

Earlier, in February, too rapid depletion of storage facilities, windlessness and the shutdown of Ukrainian transit led to prices rising to almost $ 640 per thousand cubic meters — the highest level in the last two years.

However, at the end of the month, warming, wind, larger LNG supplies came to the region, and negotiations between Russia and the United States raised hopes for a speedy peace.

It is not known how the situation will develop further. It is known that the stop of Ukrainian transit and the depletion of European storage facilities will require additional purchases of 45-50 billion cubic meters. At the same time, new LNG projects in the USA and Africa will be able to produce no more than 27 billion cubic meters.

As Bloomberg notes, traders continue to monitor the fighting between Ukraine and Russia, as energy facilities are under attack, and Turkish Stream is the only route for Russian pipeline gas supplies to Europe right now. Also, they are no longer confident in the imminent peaceful resolution of the conflict.

"It is unclear at what stage the United States is now, the conclusion of a peace agreement seems more distant than a week ago," ING Groep NV strategists Warren Patterson and Eva Mantey wrote in a note.