European natural gas markets are experiencing heightened volatility as the expiration of a critical pipeline transit deal between Russia and Ukraine looms. With the deal set to expire at the end of December, traders are reacting to the uncertainty surrounding future gas flows. The Slovak Prime Minister's recent discussions with Russian President Vladimir Putin highlighted the complexities of the situation, as Ukraine remains firm on not transiting Russian gas without assurances against financial benefits to the Kremlin. This geopolitical tension is causing fluctuations in European gas prices, which are currently hovering around €44 per megawatt-hour. The potential halt in gas transit through Ukraine is prompting central European countries to seek alternative, costlier sources like liquefied natural gas, which could drive prices higher in the coming months.
The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) is up 2.92% in pre-market hours on Monday, December 23, reaching $51.83 as of 6:00 AM ET.