Electricity prices in Europe hit new records as Russia cuts gas supply

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  • Electricity prices in Europe could hit new highs next month as shrinking natural gas supplies from Russia rattle the continent’s power market.
  • German electricity for August delivery traded at 385 euros, a jump of 23% from the daily average for July.
  • Russian state-owned Gazprom cut flows to 20% of Nord Stream pipeline capacity this week.

Electricity prices in Europe could hit new highs next month as shrinking natural gas supplies from Russia rattle the continent’s power market.

German power contracts, the benchmark European price, for August delivery changed hands at 385 euros, or $394, per megawatt-hour on Friday, a 23% jump from the daily average for the month of July, according to the Epex Spot exchange data compiled by Bloomberg.

On Wednesday, German power for delivery next year hit a record 388 euros per megawatt-hour on Wednesday, but then fell back to 360 euros.

Elsewhere, electricity prices in Europe were even higher. French prices for August are up 17% compared to the average daily rate for July, which was 404 euros

Europe is simultaneously grappling with scorching temperatures and the prospect of a complete shutdown of flows from Russia while trying to shore up supplies for the winter.

Russian state-owned Gazprom cut flows to 20% of Nord Stream pipeline capacity this week, after cutting flows to 40%. The company blamed technical problems, but European officials accused President Vladimir Putin of militarizing the gas supply to retaliate against sanctions imposed after Russia invaded Ukraine.

And the prospect of a Russian cut is putting Europe against the clock, as the continent races to build up levels of gas storage ahead of winter.

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