European gas roars to record 345 euros on Russian supply fears

[LONDON] European energy prices roared to fresh records after the US said it was considering curbs on imports of Russian oil, a move that would add to supply fears across commodity markets.

Benchmark gas prices jumped 79 per cent to 345 euros (S$510.85) per megawatt-hour. It extends a stunning rally after prices doubled last week with Russia's invasion of Ukraine and international sanctions targeting Moscow upending commodities markets across the globe.

Crude rose past US$139 a barrel in London and metals from copper to gold also surged. Gas exports from Russia, which account for about a third of Europe's demand, are currently not covered by penalties. Shipments remain stable, with Russian exporter Gazprom PJSC reiterating on Monday that flows crossing Ukraine are at a high level and going as normal.

However, traders remain on edge for any potential disruptions. US House Speaker Nancy Pelosi said in a note to lawmakers on Sunday that the House is "exploring strong legislation" that would ban the import of Russian oil and energy products, among other steps to isolate Russia from the global economy. The move would add to economic pressure and soaring inflation as governments seek to punish Moscow for its invasion of Ukraine.

Any ban or cutoff of Russian gas flows to Europe could require "extreme" government measures to ration supplies for the industry and consumers, the head of France's Engie told Les Echos newspaper. Europe has enough supplies to get through this winter, but problems would arise in building stockpiles over the summer for the next heating season, Catherine MacGregor said in an interview published on Monday.

BLOOMBERG