Fresh Western sanctions against Russia and escalating turmoil in Ukraine have led to an increase in UK gas prices, with the contract for deliveries during the coming winter moving to 58.50 pence/therm, 7% higher than its all-time low last week.
The US sanctions imposed Wednesday included two Russian energy giants, Novatek and Rosneft, amongst its targets in the latest blow aimed at punishing Moscow over the Ukraine crisis.
Russia, Europe's largest gas supplier, condemned the sanctions and spoke of retaliations.
"We do not intend to tolerate blackmail and reserve the right to take retaliatory measure," the country's foreign ministry said.
Meanwhile, Kiev on Thursday accused a Russian air force jet of shooting down a Ukrainian warplane over its own territory Wednesday, ratcheting up tensions between between Russia and the key transit state of Russian gas into Europe, Ukraine.
Gas prices across Europe have sporadically jumped over the past few months in response to violence and political disputes in the region. Overall, however, they have fallen as no physical volumes of gas to Europe have been impacted and the general supply situation is very healthy.
The Winter 2014 UK gas contract was at its lowest ever level last week since Platts began assessing the contract in 2011. It closed trading at 54.85 p/th on July 10. Over the course of 2013, the contract averaged a significantly higher 70.85 p/th.
The bumped up price Thursday, while remaining historically low, is the highest the contract has traded at since June 30.
