European gas prices hit 2-year high as supply fears intensify
Futures rose as much as 4.1% on Monday to $59.81/MWh, highest since February 2023
BEuropean natural gas prices rose to a two-year high as colder temperatures accelerate the depletion of the region’s storage facilities.
Benchmark futures rose as much as 4.1 per cent on Monday to €58 ($59.81) a megawatt-hour. That’s the highest since February 2023, after contracts posted four consecutive weeks of gains.
Big freeze
Northwest Europe is bracing for freezing temperatures in the coming days, which could boost heating demand and add impetus to the rally that’s dominated the year so far.
Higher fuel consumption risks draining stockpiles further, which are already at their lowest for this time of year since the energy crisis in 2022.
Lower inventories
Chilly and low-wind conditions across Europe have boosted gas consumption this winter and weighed on renewable generation.
Inventories are only 49 per cent full compared with 67 per cent at the same time last year, making it harder to replenish them during the warm months.
“The risk of the European Union entering the spring with very low gas inventories has increased in the last couple of weeks,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.
“Not only has the front month spiked, but we have also seen a rise in 2026–2027 calendar prices.”
Bullish
In another sign of the bullishness dominating the market, gas options are indicating that traders are rushing to snap up protection against surging European gas prices, signaling they expect more disruption to supplies heading into the stockpiling season.
Traders are also keeping a close eye on the impact of US tariffs and threats against global trade partners. President Donald Trump plans to impose 25 per cent tariffs on all imports of steel and aluminum into the US, and is also considering import duties on the EU. A tit-for-tat escalation would risk making liquefied natural gas imports more expensive, for which the US is Europe’s biggest supplier.
Dutch front-month futures, Europe’s gas benchmark, rose 2.7% to €57.26 a megawatt-hour at 8:42 a.m. in Amsterdam.
