It was a dramatic March for gas trading and gas sales, characterised by fears that Russian gas flows would come to a standstill and/or that trading would collapse entirely due to the failure of major trading companies. The result was an extreme price spike and incredible intra-day volatility, especially in the first ten trading days of March. The price peak of 350.00 euros/MWh for the DayAhead on 7 March was in almost every daily newspaper. It was reached at 10:00 am. By the time of settlement, the price on THE VHP had fallen again to around 220 euros/MWh on that day.
1.1 Gas supplies: Everything quite "normal"
The absurd thing about the situation is that fundamentally supply was much better in March before the start of the Ukraine war, as gas flows from Russia increased. Even via Mallnow, gas flowed again from east to west on some days (Figure 1). This was due to increased nominations from customers who have long-term contracts. According to all that is known, the contracts are usually indexed Month-Ahead. This meant that procurement under the contracts in March was cheaper than procurement on the spot markets. In the second half of the month, gas flows from Russia fell again, but again this was probably solely due to changes in nominations. So far, there is no sign of a restriction of deliveries by the Russian side. However, the announcement by Russian President Vladimir Putin on 23 March to accept only payments in roubles for gas deliveries from the end of March caused considerable unrest. The German Minister of Economic Affairs, Robert Habeck, described this as a clear breach of contract, as payment in US dollars or euros is agreed in the supply contracts. The consequences of the announcement were not yet known at the time of going to press...