European natural gas prices have climbed above €55 per megawatt-hour for the first time in 16 months, driven by colder temperatures across the continent that are increasing demand for heating fuel. The rise in consumption is further depleting gas storage reserves, which have already seen a significant drop compared to the previous year.

As of 15:15 Bulgarian time, March futures at the Dutch TTF gas hub surged more than 3.5% intraday, reaching €55.40 per megawatt-hour. This marks the highest price level recorded since October 2023. Meteorologists expect temperatures in northwestern Europe to decline further in the coming days, likely accelerating withdrawals from gas storage facilities.

Gas reserves in Europe stood at 51.3% of capacity as of February 4, a sharp decrease from the nearly 69% recorded at the same time last year. The strong drawdown has been driven by an unusually cold winter, which has significantly increased demand for heating and gas-fired power generation.

Despite ample supply, prices have continued their upward trend. Norwegian gas exports have increased following the completion of maintenance work at the Njord field, while liquefied natural gas (LNG) shipments to Europe have remained stable. However, traders remain cautious about potential market disruptions amid escalating trade tensions between the United States and China. Beijing recently imposed a 15% tariff on US LNG imports in response to former President Donald Trump’s decision to introduce additional 10% tariffs on Chinese goods.

Sources:

• Eurostat
• BNR