Market prices rallied significantly following news that the Malaysian Airlines flight MH17 was shot down in the far-eastern region of Ukraine, currently controlled by pro-Russian separatists, enflaming the already hostile relationship between the two countries.
At around 1600BST UK gas for near-term delivery was trading at 37.95 pence per therm but rallied to 39 pence per therm over the half hour after news of the plane attack broke, according to price reporting agency Icis.
Gas for delivery this winter rose from 57.95 pence per therm to 59.60 pence per therm in 40 minutes, over 8 per cent higher than the lowest price paid for the Winter 14 contract of 54.70 pence per therm one week ago.
“It is worth noting that these contracts were moving up before the plane crash, partially in response to bullish sentiment stemming from the Russian sanctions,” said Icis gas analyst Ben Samuel.
Gas prices were trading up earlier on Thursday following US sanctions which were imposed Wednesday and included two Russian energy companies, Novatek and Rosneft.
Friday’s trading session was described by traders as “tense” and “tentative”, with prices holding much the previous day’s gains.
At 1600BST Friday near-term gas was seen trading at 38.70 pence per therm while winter gas changed hands at slightly lower levels at 58.95 pence per therm.
“I think we’ll have a lot of nerves until more information emerges,” one trader told Utility Week.