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European natural gas prices rose after a second straight weekly decline, as another spell of colder weather passes through the region.
Temperatures across the continent are forecast to drop again this week. Together with some project maintenance in Norway in the coming days, there could be an upside for near-term prices. While the cold spell is expected to be brief, the frequent chilly bouts are keeping gas above normal levels for the time of year. Benchmark futures rose as much as 4.1% higher on Monday.
Still, Europe has successfully managed to ride out the energy crisis that at one time had threatened to bring major shortages. The official end of the heating season is just days away, and storage sites have already started replenishing over the past week, with Italy and Germany leading the way. Imports of liquefied natural gas remain strong.
Buyers in Europe are also closely monitoring the progress of the Freeport LNG export plant in Texas, a major supplier to the continent before it was halted last year after a fire. The project recently resumed operations, but canceled at least one cargo this month following another technical glitch.
Monday’s “drivers of prices are the cold and concerns about Freeport,” said James Waddell, head of European gas at consultant Energy Aspects Ltd. “The fact that we’re already near lots of the support levels on the downside, you wouldn’t expect to see much more of a fall, whereas the upside is any disruption will pick prices up from here.”
Dutch front-month futures, Europe’s gas benchmark, was 3.5% higher at €42.55 a megawatt-hour at 10:23 a.m. in Amsterdam. The UK equivalent contract rose 4.3%.
