European power prices eye fresh record highs as Russia keeps natural gas supplies tight

• European power prices could hit new highs next month as Russia's pullback of natural gas supplies rattles the continent's electricity market.
• German power for August delivery was changing hands at 385 euros, a 23% jump in the daily average for the month of July.

European power prices could hit new highs next month as Russia's pullback of natural gas supplies rattles the continent's electricity market.

German power contracts, the benchmark European price, for August delivery was changing hands at 385 euros, or $394, per megawatt hour on Friday, a 23% jump in the daily average for the month of July, according to Epex Spot exchange data compiled by Bloomberg.

On Wednesday, German power for delivery next year shot up to a record 388 euros per megawatt hour on Wednesday, but later retreated to 360 euros.

Elsewhere, European power prices were even higher. French prices for August are up 17% from the average day-ahead rate for July, which was 404 euros

Europe is simultaneously grappling with scorching temperatures and the prospect of a full shutoff of flows from Russia while trying to shore up supplies for the winter.

Russia's state-run Gazprom scaled back flows to 20% of the Nord Stream pipeline's capacity this week, after reducing flows to 40%. The company blamed technical problems but European officials have accused President Vladimir Putin of weaponizing gas supplies to retaliate against sanctions imposed after Russia invaded Ukraine.

And the prospect of a Russian cutoff is pitting Europe against the clock, as the continent is racing to build up gas storage levels before winter.