European Gas Rally Continues with Focus on Sanctions on Russia

Liquefied natural gas (LNG) dispenses through pipes on-board the Gallina LNG tanker after docking at the National Grid Plc's Grain LNG plant on the Isle of Grain in Rochester, U.K., on Saturday, March 4, 2017. The shipment to England on the Gallina was priced using the U.K.'s National Balancing Point, where front-month gas cost about $7 a million British thermal units on Feb. 7. Photographer: Jason Alden/Bloomberg , Photographer: Jason Alden/Bloomberg

European natural gas surged for a fourth day as the market continues to focus on sanctions on Russia in response to its invasion of Ukraine.

Dutch front-month futures traded 7.4% higher at 177.76 euros per megawatt-hour by 8:16 a.m. in Amsterdam, after initially jumping as much as 12%. The benchmark surged to a record high on Wednesday before paring some of those gains.

While sanctions don’t target Russian energy exports, traders and shippers are shying away from dealing with Russian suppliers, including Gazprom PJSC’s energy-trading arm.

Still, Russian gas continues to flow through pipelines to Europe, including those transiting Ukraine. Supplies through a key pipeline to Slovakia’s Velke Kapusany station remain high and Gazprom booked some pipeline capacity for Thursday to send gas to the Mallnow station in Germany.