European natural gas futures climbed to over €43.5 per megawatt-hour on Friday, extending their recovery from a one-month low of €39 hit on December 16th.
EU natural gas extends rebound
The rise comes amid growing uncertainty over the ability of central European economies to maintain Russian gas supplies after the end of the year. Utilities in Slovakia and Hungary are bracing for a halt in gas flows from Russia via Ukraine after December, prompting them to seek alternative sources and causing traders to increase long positions in LNG contracts. Both Moscow and Kyiv have stated that the deal will not be renewed, although discussions are still ongoing about possible extensions, despite the EU Commission's commitment to phasing out Russian fossil fuels.
Shifting suppliers
Other major gas consumers have turned to different suppliers, with key German utilities securing LNG contracts with the UAE's ADNOC, while the UK's record wind power generation has allowed for electricity exports to the continent.
