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European natural gas prices advanced after a halt in Egyptian imports dashed hopes for a resumption of deliveries to Europe, adding to supply risks just as Israel widened its ground offensive in Gaza.
December futures jumped as much as 4.5% on Monday. Prices are around 30% higher than before the war in the Middle East erupted three weeks ago, highlighting the vulnerability of Europe’s market to geopolitical risks after last year’s energy crisis.
With no gas now flowing from Israel to Egypt, it’s unclear when onward tanker-borne exports from the North African country might pick up. While flows to Europe typically make up a small share, a key threat for energy markets would be involvement of other regional powers and disruptions to the Strait of Hormuz, a vital waterway for crude oil and liquefied natural gas.
Europe needs LNG from any source it can get to maintain its equilibrium after most Russian pipeline gas flows stopped in light of its ongoing war in Ukraine.
Supply interruptions have also occurred within the region, with flows from biggest supplier Norway dipping over the weekend after a compressor failure at the Nyhamna gas processing plant.
December futures, the most active contract, gained 3.4% to €54.82 a megawatt-hour at 8:27 a.m. in Amsterdam.
