European natural gas prices halted their decline as cold weather grips the northern fringe of the region, testing energy networks in the final weeks of winter.
Benchmark futures rose as much as 3.8%, after falling during the previous three sessions.
The UK is facing snow, ice and unusually low temperatures throughout the week as an arctic blast moves through the country. On Tuesday, Britain’s grid operator called on a back-up coal plant for the first time to make up for the energy shortfall.
Meanwhile, temperatures across northwest Europe and the Nordics are forecast to stay below normal levels until mid-April, according to the European Centre for Medium-Range Weather Forecasts.
Europe began this winter facing its worst energy crisis in decades, and — while it has avoided serious disruptions so far — the current freeze is a reminder that the supply crunch isn’t quite over yet. Icy conditions this month have already increased withdrawals from gas storage sites, which will need to be refilled over the summer.
Colder Weather Seen Across Northwest Europe
Below-normal temperatures expected until mid-April
Source: ECMWF
For now, storage facilities in Northwest Europe and Italy are expected to be 100% full by the end of September in average weather conditions, according to BloombergNEF. Still, steady flows of liquefied natural gas and containment of demand will continue to be important factors.
“LNG inflows could surpass the levels seen last summer to make up for lost Russian pipeline volumes, but continued gas demand destruction across residential and industrial sectors is also needed to refill storage before next winter,” according to BNEF’s gas summer outlook.
There are also a few headwinds. French LNG ports were shut Tuesday amid widespread strikes. In the US, energy regulators are seeking more answers from the Freeport LNG export facility in Texas before it can fully restart after an explosion last year.
Inspired Energy, a consultancy, said in a note that a request by US energy regulators for additional information from Freeport LNG “casts some doubt as to whether the plant will become fully operational again toward the end of this month, which may lead to some short-term bullish sentiment in European gas markets.”
Read more:
France’s LNG Terminals Blocked by Strikes Over Pension Reform
EU to Flex Collective Buying Clout in Gas Market Next Month
Morgan Stanley Slashes European Gas Price Outlook on Weak Demand
Competition for LNG is also intensifying amid re-emerging demand in Asia. US LNG exports are currently more profitable to send to Asia rather than Europe in April, according to BNEF.
Dutch front-month futures, Europe’s gas benchmark, rose 2.8% to €43.31 a megawatt-hour by 5:18 p.m. in Amsterdam. The UK equivalent advanced by 3.2%. Power prices also gained, with the peak French contract for delivery Tuesday trading at €380 on the Epex Spot SE.
European natural gas prices halted their decline as cold weather grips the northern fringe of the region, testing energy networks in the final weeks of winter.
Benchmark futures rose as much as 3.8%, after falling during the previous three sessions.
The UK is facing snow, ice and unusually low temperatures throughout the week as an arctic blast moves through the country. On Tuesday, Britain’s grid operator called on a back-up coal plant for the first time to make up for the energy shortfall.
Meanwhile, temperatures across northwest Europe and the Nordics are forecast to stay below normal levels until mid-April, according to the European Centre for Medium-Range Weather Forecasts.
Europe began this winter facing its worst energy crisis in decades, and — while it has avoided serious disruptions so far — the current freeze is a reminder that the supply crunch isn’t quite over yet. Icy conditions this month have already increased withdrawals from gas storage sites, which will need to be refilled over the summer.
Colder Weather Seen Across Northwest Europe
Below-normal temperatures expected until mid-April
Source: ECMWF
For now, storage facilities in Northwest Europe and Italy are expected to be 100% full by the end of September in average weather conditions, according to BloombergNEF. Still, steady flows of liquefied natural gas and containment of demand will continue to be important factors.
“LNG inflows could surpass the levels seen last summer to make up for lost Russian pipeline volumes, but continued gas demand destruction across residential and industrial sectors is also needed to refill storage before next winter,” according to BNEF’s gas summer outlook.
There are also a few headwinds. French LNG ports were shut Tuesday amid widespread strikes. In the US, energy regulators are seeking more answers from the Freeport LNG export facility in Texas before it can fully restart after an explosion last year.
Inspired Energy, a consultancy, said in a note that a request by US energy regulators for additional information from Freeport LNG “casts some doubt as to whether the plant will become fully operational again toward the end of this month, which may lead to some short-term bullish sentiment in European gas markets.”
Read more:
France’s LNG Terminals Blocked by Strikes Over Pension Reform
EU to Flex Collective Buying Clout in Gas Market Next Month
Morgan Stanley Slashes European Gas Price Outlook on Weak Demand
Competition for LNG is also intensifying amid re-emerging demand in Asia. US LNG exports are currently more profitable to send to Asia rather than Europe in April, according to BNEF.
Dutch front-month futures, Europe’s gas benchmark, rose 2.8% to €43.31 a megawatt-hour by 5:18 p.m. in Amsterdam. The UK equivalent advanced by 3.2%. Power prices also gained, with the peak French contract for delivery Tuesday trading at €380 on the Epex Spot SE.