UPDATE 1-Gazprom says gas prices could destabilising Europe’s economy

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SAINT PETERSBURG, RUSSIA, OCT 7 (Businesshala) – Europe’s rising gas prices could destabilize the region’s economy, the head of the export arm of Russian gas producer Gazprom told a forum on Thursday, but there was a marked clash between producers and consumers. Collaboration can help balance the market.

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Prices have risen by more than 800% this year, raising concerns about inflation and energy poverty this winter.

He has relaxed the markets this week giving some relief.

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“Currently, the European spot market shows a high price volatility and is distracting both buyers and sellers, (this) brings the risk of destabilizing the entire regional economy,” said Elena Burmistrova, head of Gazprom Export.

“The European spot market merely reflects the current state of demand and supply, but is not a pricing tool that provides a long-term balance.”

Burmistrova reiterated that Gazprom was meeting its obligations under its long-term contracts, something even its largest European clients have confirmed.

“We are supplying gas in addition to contract requests where we have such a technical possibility,” she said.

On Wednesday, the price of gas at the Dutch TTF hub fell to 155 euros per megawatt hour (MWh) before lowering following comments from Russian President Vladimir Putin. It fell to 102 euros per MW on Thursday.

Putin said Moscow did not need turmoil in the gas market, adding that Russia should sell more gas on its St. Petersburg exchange, which offers gas to European spot buyers. It was not immediately clear what routes Russia would use for this.

Reporting by Oksana Kobzeva and Katya Golubkova; Editing by David Goodman and Jason Neely

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