UK Gas Prices on the Rise Due to Threat of Gazprom Ban

Bloomberg reported that over the last six weeks, gas for next-month delivery in the UK has risen 17 percent, largely because Ukraine said it may ban Gazprom OAO (MCX:GAZP), a major European gas supplier, from shipping the fuel across its territory.

The climb is allowing gas to reverse its “biggest slump in five years.”

As quoted in the market news:

The Moscow-based company, which meets 15 percent of European gas demand through Soviet-era pipelines across Ukraine, halted supplies to its neighbor on June 16 in a debt and price dispute.

‘The continued threat of gas transit interruption is putting upside risk into gas prices,’ Nick Eagle, director of sales and trading at Clean Energy Trading Ltd. in London, said yesterday by e-mail. ‘While there’s no denying European gas storage levels are in a very healthy position, there would be significantly more concern if any disruption was to occur during the winter period.’

Here’s what prices currently look like: 

U.K. gas for next-month delivery gained 6.05 pence since falling to a four-year low on July 8 to 41.3 pence a therm ($6.87 a million British thermal units) at 5:06 p.m. in London, according to broker data compiled by Bloomberg. The front-month price is the lowest for this time of year since 2010.

Click here to read the full Bloomberg report.