After finding a floor of around 22 euros a megawatt-hour at the start of June, European natural gas prices have jumped more than 100%. We have detailed the latest price surge in two pieces, titled “EU NatGas Soars Most In Year As Traders On Edge About ‘Possibility Of Tightening Supplies'” and “EU NatGas Jumps Again, Up 15% As Supply Fears Driven By Extended Outages In Norway.”
On Thursday morning, the month-ahead benchmark contracts skyrocketed as much as 30% to 49 euros. The multi-week rip-your-face-off rally has led to 112% gains.
The squeeze higher is due to the prospect of tightening supplies with maintenance work continuing at major Norwegian facilities through July. There are also fears that a hot summer could drive up cooling demand, which would increase fuel use.
James Waddell, head of European gas and global LNG at consultant Energy Aspects Ltd., told Bloomberg that concerns about European LNG supplies and Norwegian outages “have been the physical triggers.” He added: “But we have to remember that a lot of the market was short going into this month and price rises will have triggered stop- outs, thereby driving the price even higher.”