Supply shocks in European gas output prompted spike in gas futures prices
After numerous earthquakes that damaged thousands of homes, the Netherlands has decided to permanently close the largest gas field in Groningen in October of this year. This news has caused a 30% increase in European natural gas futures, according to Business Insider.
While a final decision on the oldest Groningen field, which has been in operation for 60 years, has not yet been made, the government meeting at the end of June will make it official.
The news prompted a 30% rise in Dutch gas futures for delivery in the following month before prices trimmed their gains, ultimately increasing by 10% to €42.16 per megawatt-hour.
The decision to close Europe's main gas source is related to a series of earthquakes caused by production activities, which have destroyed thousands of homes in the region since the 1980s, further intensifying political pressure on the government.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.