Well that didn't take long. Home prices are not the only thing surging in Britain as Reuters reports [5] British spot wholesale gas prices climbed over 7% after Ukraine and Russia failed to agree on the price of future gas deliveries. Britain gets around 5% of its gas from Russian sources and a mild winter and spring have prompted utilities to inject more gas into storage than usual. One analyst notes "as yet flows through Ukraine to Europe have not been disrupted but the market has become increasingly concerned that they will," and now, following the explosion in the largest gas transit pipeline in Europe, disruptions have begun.
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"Prompt prices have opened significantly higher on the risk of a halt to Russian supplies at some point today," a gas trader said.
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Gazprom said it would continue to supply European consumers with gas at "full volume" and Ukraine's state-owned Naftogaz should make sure it transits through the country.
Britain gets around 5 percent of its gas from Russian sources and a mild winter and spring have prompted utilities to inject more gas into storage than usual.
Britain's storage facilities are currently 77.5 percent full, according to Gas Infrastructure Europe, and injections into storage so far on Monday were around 44 million cubic metres (mcm).
Increased injections into storage have likely led to undersupply, as gas flows from Norway are largely stable.
Britain's gas system was undersupplied by around 24 mcm on Monday morning. Demand was forecast to be 190 mcm, while flows were expected to be around 166 mcm, according to National Grid data.
As a result, gas for immediate delivery on Monday was 2.75 pence or 6.6 percent higher at 44.00 pence per therm.
"As yet flows through Ukraine to Europe have not been disrupted but the market has become increasingly concerned that they will," said Thomson Reuters Point Carbon analyst Oliver Sanderson.
Prices have stabilized today but the jump in the last few days is a clear example of the fragility and interconnectivity of 'costs' from the Russia-Ukraine situation.
