Natural gas prices in Europe rose on geopolitical risks to supplies and expectations of cooler weather ahead of the heating season.
Benchmark futures rose 3.1% on Monday, after falling 3.4% last week, and the market was volatile amid rising tensions in the Middle East, with Israel stepping up airstrikes against Hezbollah in southern Lebanon. Israel’s gas fields help meet domestic demand and also supply neighboring Egypt and Jordan.
In Ukraine, where Russian gas is piped to central Europe, Russian threats to energy infrastructure continue. Moscow may be planning strikes on nuclear sites, according to the Ukrainian foreign minister. Russia is also pushing Ukrainian forces out of the Kursk region, where the Sudzha gas transfer point is located.
After a dip last week, markets have returned to normal levels as attacks on the Ukraine-Russia border continue, consultancy Auxilione said in a note.
In Norway, Europe’s largest supplier, several unexpected outages have exacerbated the impact of seasonal work at gas facilities. In the US, flows to the Cove Point LNG export terminal fell over the weekend as scheduled maintenance was scheduled.
On the demand side, temperatures in parts of Europe are expected to fall below seasonal averages by the end of this week, which could boost the use of gas for heating.
Dutch futures for the next month, the benchmark for gas prices in Europe, advanced 2.35% to €35.26 per megawatt hour by 1:45 p.m. in Amsterdam.
