LONDON, UNITED KINGDOM — European and UK gas prices surged Wednesday to record peaks, energised by fears of runaway demand in the upcoming northern hemisphere winter.

Europe’s reference Dutch TTF gas price hit 162.12 euros per megawatt hour and UK prices leapt to 407.82 pence per therm in morning deals.

However, prices later reversed as supply concerns eased somewhat.

“It’s panic and fear with winter just around the corner,” Commerzbank analyst Carsten Fritsch told AFP.

Soaring gas prices — coupled with oil which has struck multi-year highs — have fuelled fears over spiking inflation and rocketing domestic energy bills.

Gas demand is also heightened in Asia, particularly from China, while key Russian exports are falling.

Europe to blame: Putin 

However, Russian President Vladimir Putin declared Wednesday that Europe was to blame for the current energy crisis, after the soaring gas prices spurred accusations that Moscow is withholding supplies to pressure the West.

“They’ve made mistakes,” Putin said in a televised meeting with Russian energy officials.

He said that one of the factors influencing the prices was the termination of “long-term contracts” in favour of the spot market.

Some critics have accused Moscow of intentionally limiting gas supplies to Europe in an effort to hasten the launch of Nord Stream 2, a controversial pipeline connecting Russia with Germany.

At the same time, global gas stockpiles remain worryingly low.

“Natural gas prices have climbed to new peaks … as insufficient levels of inventories ahead of the winter season drive concerns for a spike in inflation and energy prices for consumers,” XTB analyst Walid Koudmani told AFP.

“These supply constraints could translate into higher costs of fuel moving into the winter months, a prospect which could further slow down economic recovery and worsen moods across markets.”

Europe’s energy crisis has also been exacerbated by a lack of wind for turbine sites, coupled with ongoing nuclear outages — and the winding down of coal mines by climate-conscious governments.

Gas demand has also galloped higher in recent months as economies reopened worldwide from their Covid-induced slumber.

“The rebound in industrial activity across the world following months of Covid-related restrictions and widespread remote working … boosted demand for natural gas,” noted UniCredit economist Edoardo Campanella.

European gas futures have now multiplied by eight since April.

And the market is set to shoot even higher, according to French bank Societe Generale.

“Never before have power prices risen so far, so fast,” wrote Societe Generale analysts in a client note.

“And we are only a few days into autumn — temperatures are still mild.

“A cold winter could cause severe problems for Europe’s energy markets, where politicians are already trying to contain the fallout.”

However gas prices eased later Wednesday as Putin, despite blaming Europe for the current situation, ordered state-controlled gas company Gazprom to maintain shipments through Ukraine.

“News that Russia will boost gas supplies has steadied market nerves a little this afternoon and helped temper those record price hikes but businesses are worried, and investors are too,” said AJ Bell financial analyst Danni Hewson.

Brussels mulls energy crisis 

European leaders are divided on how to respond to the record rise in energy prices, with France and Spain calling Wednesday for bold EU-wide action, while others urged patience.

The European Commission — which is the European Union’s executive arm — will next week propose measures to mitigate the price surge for consumers.

Those suggestions will then be discussed by the bloc’s leaders at a summit in Brussels on October 21-22.

Britain is particularly exposed to Europe’s energy crisis because of its reliance on natural gas to generate electricity.