Gas prices in Europe jumped again today with the first signs of a significant drop in temperatures and amid concerns about LNG imports due to the ongoing shutdown of the Freeport LNG in Texas.
The price for December delivery contracts (TTF) increased this morning at 10.00 by 7.3% to 122 euro per megawatt hour after yesterday's big rise, having earlier reached close to 125 euros.
Below normal temperatures in NW Europe
The temperatures in Northwest Europe are expected to fall below normal seasonal levels towards the end of the week, forcing households to start using heating with a consequent increase in gas demand.
At the same time, the June shutdown of Freeport LNG in Texas is expected to be extended, increasing global competition for the necessary supplies just before winter begins.
The first test ahead of winter
The combination of low temperatures and supply problems is a reminder that Europe will be vulnerable in the first winter without significant Russian gas flows.
Gas prices in the US also moved upwards, where below normal temperatures are also forecast for most of the country.
Gas prices in Europe had fallen to a four-month low in early November and moved below EUR 100 per megawatt hour as a warm October allowed storage tanks to fill.
Very high levels of storage occupancy combined with high LNG imports and mild weather in October and early November reduced concerns about the balance of gas supply and demand at the beginning of the heating season.
Current LNG prices decreased
Despite increased demand from Europe and Asia, LNG spot prices have, however, continued to fall, according to the Natural Gas World website.
