European gas contracts jump 4% following Putin's warnings today.

European natural gas futures prices rose by more than 4% during trading on Friday after Russian President Vladimir Putin expressed doubts about the likelihood of a new agreement for the delivery of Russian gas to Europe via Ukraine, as the current deal approaches its expiration at the end of this year.

In confirmation of this, the spokesperson for the Ukrainian Foreign Ministry stated that there will be no transit of Russian gas across Ukrainian territory starting January 1. Although Central European countries, which are in dire need of Russian gas with the onset of winter, proposed alternative solutions, Ukrainian President Zelensky rejected any deal that would increase Russia's revenues while the war between their countries continues.

So far, despite ongoing negotiations, no gas shipments have been booked for January at the Slovak-Austrian border. Putin acknowledged that alternative proposals to supply gas to Europe may be difficult due to existing long-term contracts, and if an agreement cannot be reached, about 5% of Europe’s natural gas needs could be at risk.

If it comes to that, it would require increased reliance on liquefied natural gas from Norway and the United States. This comes at a time when the lawsuit filed by the Ukrainian gas company Naftogaz against its Russian counterpart Gazprom regarding unpaid transit fees adds complications to any potential deal.

However, Russian Deputy Prime Minister and former Energy Minister Alexander Novak stated earlier this week that Russia is willing to continue supplying gas to Europe via several other ways different from the current route, but he has not spoken about any further details yet.

In terms of trading, Dutch natural gas futures prices rose by 4.8% to record €47.91 per megawatt/hour, while British natural gas futures prices increased by 3.6% to record £119.72 per million British thermal units.