UPDATE 1-Kremlin says spot market is behind gas prices rally in Europe

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MOSCOW, Sept 22 (Reuters) - Trade on the spot market is behind the surge in natural gas prices in Europe, a Kremlin spokesman said on Wednesday, reiterating that Russian state energy giant Gazprom is sticking to its contractual obligations in full.

The gas market chaos, which has driven prices 280% higher in Europe this year is being blamed on a range of factors from low storage levels to restrained Russian supplies.

The Kremlin spokesman, Dmitry Peskov, dismissed allegations that Moscow could be partly blamed for soaring gas bills in Europe.

“They (Europe) prefer to focus on spot supplies, on the spot market. It is exactly the spot market that leads to such jumps, like this rampant price rise,” Peskov told a daily conference call with reporters.

Russian gas giant Gazprom has been unwilling to shift the gas price-making mechanism to the spot market, preferring long-term gas contracts, once its backbone of gas sales to Europe.

There have been calls in Europe to investigate Gazprom’s role in soaring European gas prices.

The Kremlin spokesman said state-controlled Gazprom is a reliable gas supplier to Europe.

“Our company and Russia fulfil contractual obligations to European consumers by 100% and even more,” he said.

“Moreover, as far as we know, we are close to historical peaks of gas volumes supplied to European buyers.”

Peskov also said that Russian gas supplies to Europe through Ukraine after 2024, when the current transit deal expires, depend on gas demand. (Reporting by Gleb Stolyarov; writing by Vladimir Soldatkin; Editing by Louise Heavens, Alexandra Hudson)