European natural gas futures surpassed €54.5 per megawatt hour, the highest since February 2023, as colder weather drove up demand and accelerated inventory depletion.
TTF prices rise to two-year high
Temperatures in northwest Europe are expected to drop further in the coming weeks, intensifying heating demand and putting additional strain on gas reserves. Currently, European gas storage stands at around 51% capacity, a sharp decline from 69% a year ago, following an unexpectedly harsh winter that required heavier withdrawals from storage facilities.
Norwegian gas exports increased
On the supply side, Norwegian gas exports have increased after maintenance work at the Njord field was completed, helping to partially offset some of the tightening in supply. Meanwhile, LNG send-out remains steady, providing some stability to the market, though concerns persist over global LNG availability amid geopolitical tensions and shifting trade policies.
Eyes on trade war
Traders are also closely monitoring international trade developments, particularly after China imposed a 15% tariff on US liquefied natural gas in response to Trump’s latest tariffs on Chinese goods. This escalation in trade tensions has raised concerns over potential disruptions in global LNG flows, as China may seek alternative suppliers, potentially tightening availability for European buyers. Additionally, ongoing conflicts in the Red Sea and disruptions to key shipping routes continue to add uncertainty to the supply outlook, keeping prices elevated.
With weather conditions, storage levels, and geopolitical risks all playing a role, market participants are bracing for continued volatility in European natural gas prices in the near term.
