Article originally in the Financial Times.
Gas prices in Europe reached a two -year maximum on Monday, as the colder weather increased demand and accelerated the pumping of gas from fast exhausting storage tanks.
TTF European Benchmark TTF contracts increased by up to 4.5 percent to EUR 58.50 per megawatt -hour, the highest level since February 2023. a unit of thermal energy, which is also a two -year maximum.
At least from the energy crisis
Longer colder weather in northwest Europe is expected to usually increase heating demand, leading to further pumping from European gas reserves, which are already at the lowest level for this time of year since the energy crisis in 2022.
Europe has survived two consecutive winter from the Russian full -format invasion of Ukraine by replacing gas supply from the gas pipelines from Moscow by importing liquefied natural gas from other parts of the world. Last year, the import of liquefied natural gas ensured approximately 34 percent of gas in Europe compared to 20 percent in 2021.
European storage tanks were full before winter, but since then countries had to draw on these stocks to a greater extent than in the previous two years as a result of colder weather and increased competition of liquefied natural gas from Asia.
According to data from the industrial organization GAS Infrastructure Europe, the volume of gas in the Union stacks decreased by approximately 19 percent by mid -December, when the supply season is completed in gas markets. In the previous two years, the decline in the same period was single -digit.
European gas storage tanks are currently filled to 49 percent. In the same period last year it was 67 percent, analysts said. The supply of Russian gas through Ukraine, which represented approximately five European imports, has also stopped since the beginning of the year, which has “even more balanced” the European gas market, said Natasha Fielding, head of the gas prices department in Europe in Argus.
“This means that weather changes may have a dramatic impact on prices, as traders take into account additional requirements for underground storage tanks,” she said. The forecasts now point to “current cold periods in Europe and in some parts of Northeast Asia since the end of this week”, adding that Europe will have to “compete even more” for the supply of liquefied natural gas.
The Commercial War of Delivery will not affect
The market with it is being prepared for further changes after China has announced a retaliation of a 15 % duty on the import of US liquefied gas. It responded to 10 % President Donald Trump’s CLO to all Chinese goods entering the United States.
Fielding said that the Expulsive Commercial War will cause a “reorganization” of business flows, and Chinese buyers are expected to sell their contractually agreed US liquefied natural gas to other markets, but is unlikely to affect deliveries to Europe.
“Europe is currently comfortably attracted by the vast majority of supplies of US liquefied natural gas, regardless of duties on the import of US liquefied natural gas from China,” she said.
More messages were provided by Ray Douglas
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