European gas jumped after reports Russia halted Poland supplies

European natural gas prices jumped, following reports Russia has halted deliveries to Poland. 

Flows have stopped under the Yamal contract, Onet.pl website reported, citing Polish government sources it didn’t name. Onet says it has also confirmed the news at PGNiG, Poland’s dominant gas company. 

Benchmark futures increased as much as 17% to 108.45 euros per megawatt-hour. They traded 6.4% higher at 98.76 euros by 5:46 p.m. Amsterdam time.

The market continues to be driven by supply concerns following Russia’s invasion of Ukraine. Since the start of the war, Europe has been looking for alternative energy sources and LNG has been the lifeline, limiting bigger spikes.

Russia’s demand to be paid in rubles for its gas is yet to resolved. While President Vladimir Putin warned gas flows could be cut if the terms aren’t met, the EU has said the mechanism violates existing sanctions and suggested that companies can keep paying for gas in euros. 

Flows from via Ukraine from Russia—the continent’s largest supplier—are far below levels seen earlier in April. 

Shipments from Norway are about 10% lower than last month’s average due to maintenance, according to nominations from operator Gassco AS. 

Weather, LNG

Low wind-power output is expected in parts of Europe this week and next, the Weather Co. said in a report. That could boost the need for gas for electricity. U.K. gas power generation was at 60% of the nation’s total by 8 a.m. local time, while wind output was at 8%, according to grid data.

Below-average temperatures are expected across most of Europe next week, with milder weather limited to most of the western region, Maxar said in a daily report. 

Northwest Europe’s imports of liquefied natural gas are on course to match the record levels seen in January, with at least a dozen new cargoes expected by the end of April.