"Energy Prices Will Be Stabilized," Putin Says, Natural Gas Prices Plunge

WSJ "European Natural Gas Prices Soar to 162 Euros Before Plunging to 104.9 Euros"

Vladimir Putin, President of Russia [Photo by EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee] European natural gas prices, which had soared to unprecedented levels, plummeted following a statement by Russian President Vladimir Putin expressing his commitment to stabilizing energy prices.

On the 6th (local time), the November delivery futures price of natural gas at the Netherlands TTF exchange, the benchmark for European natural gas prices, closed at 104.9 euros per megawatt-hour (MWH), down 9.6% from the previous day.

The intraday drop exceeded 30%. The Wall Street Journal (WSJ) reported that natural gas futures prices surged by as much as 40% to 162.13 euros in the morning, then fell by more than 50 euros following President Putin's remarks.

Regarding the recent energy crisis, President Putin stated, "Russia is ready to work towards stabilizing the global energy market." He also directly refuted complaints from some parts of Europe about the slow pace of Russia's gas supply expansion amid Europe's natural gas shortages.

Putin emphasized, "Russia has always been a reliable supplier fulfilling its obligations, and the volume of energy resources, including natural gas, sent to Europe this year could reach an all-time high." He explained that the recent energy crisis was due to energy demand increasing faster than expected because of a quicker economic recovery. Putin stressed that the state-owned company Gazprom is faithfully fulfilling its supply contract obligations and that Russia does not want the current energy market turmoil.

Bloomberg reported that Gazprom's exports to Europe approached record highs earlier this year, but as domestic demand in Russia increased ahead of winter, Gazprom's exports to Europe declined starting in September.

As the natural gas shortage worsens, there are calls within Europe for authorities to expedite approval of the Nord Stream 2 pipeline. Once fully operational, Nord Stream 2 will allow Russia to supply gas directly to Germany without bypassing Poland and Ukraine. President Putin stated that using Nord Stream 2 could lower European natural gas supply prices further and help stabilize energy prices.

Russian Deputy Prime Minister Alexander Novak also said that the swift approval of Nord Stream 2 could be a way to achieve energy price stability.