European natural gas prices edged higher amid continued strikes in France, which have disrupted operations at the nation’s energy facilities, alongside other supply risks.
(Bloomberg) — European natural gas prices edged higher amid continued strikes in France, which have disrupted operations at the nation’s energy facilities, alongside other supply risks.
Benchmark Dutch front-month futures settled 0.5% higher at €42.75 per megawatt hour, erasing an earlier decline. The UK equivalent contract rose 1.1%.
Strikes at three liquefied natural gas terminals operated by Elengy SA have been extended to March 30, according to the company. The disruptions have blocked the facilities for three weeks.
Europe’s official heating season is days away from drawing to a close after a mostly mild winter, yet much of the continent will see another cold spell next week, according to forecaster Maxar Technologies Inc. That could prolong heating demand.
April is set to be “on the cooler side,” analysts at Zenergi Group said in a note. “This could be pivotal as to when we see countries pivot from net withdrawal, to net injection.”
Companies in the region are also facing pressure to discontinue LNG shipments from Russia, with energy ministers in Brussels discussing possible options for countries to effectively ban them. The EU also agreed to extend reductions in gas demand by a year, with a view to ensuring there’s enough fuel available next winter.
While Europe’s gas storage levels remain well above historical averages, prices have fluctuated recently as traders weigh potential risks to flows, which will be important in preparing the continent for the next winter.
Volatility in the market is still elevated compared to historic norms, and prices may fluctuate between €30 and €60 until the official start of the next heating season in October, said Frank van Doorn, head of trading at Vattenfall Energy Trading GmbH.
The market hasn’t yet seen a significant rebound in consumption, while supplies are healthy and storage levels are high, he said at the European Gas Conference in Vienna.
–With assistance from Elena Mazneva.
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