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Gas prices rise in the UK and Europe after Wagner mutiny

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Photo: Gas Prices rise in the UK and Europe Source: collage The Gaze
Photo: Gas Prices rise in the UK and Europe Source: collage The Gaze

Gas traders are bracing for increased volatility as a brief uprising in Russia creates another supply risk for gas deliveries, reports Bloomberg.

According to traders and brokers, spot prices for liquefied natural gas in Northeast Asia rose to $12 per million British thermal units on Monday, while exchange-traded futures surged by about 50 cents to $1 more than Friday. In Europe, base futures jumped by 14%.

While the failed uprising led by Wagner Group mercenary leader Yevgeny Prigozhin is over, the crisis remains the biggest threat to President Putin's control over Russia.

Traders are monitoring any signs of further instability in Russia that could impact gas production and exports in the country. The disturbances come at a time when European gas is already experiencing the highest volatility since Russia's invasion of Ukraine in early last year.

Ongoing disruptions in Norway and plans to close gas fields in the Netherlands have led to turbulent price fluctuations this month. Despite the reduction in Russian gas supplies to Europe, some countries, including Austria and Slovakia, still rely on fuel flowing through Ukraine.

"The geopolitical risk of Russia is now significantly higher than over the weekend," said Tom Marzek-Mancer, head of gas analytics at ICIS in London. "The uncertainty of what may happen in Russia itself in the coming weeks, rather than in Ukraine, is likely to push the markets higher on Monday."

Although Europe has significantly reduced its dependence on Russian pipeline gas, Moscow remains a major supplier of liquefied gas. The continent also receives a large amount of LNG from other countries, such as the United States, and the fuel has been crucial in ensuring supplies during the energy crisis.

Other factors are also adding pressure to the market. Deliveries from Norway remain limited as several facilities undergo maintenance. Seasonal work continues at major sites, including the Nyhamna processing plant and the Troll field.

In London, oil remained relatively stable with a 0.7% increase, while wheat in Chicago rose by 1.7%. Futures for US and European stocks also saw gains.

Oil and gold markets were relatively calm on Monday after the geopolitical shock over the weekend.

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