Fears of declining US supplies raise natural gas prices in Europe

Natural gas futures prices jumped in European trading on Tuesday, in light of fears of a decline in American production and exports as a result of the snow storms taking place in the United States.
Bloomberg News Agency reported that the price of standard futures contracts in Europe rose during trading by 5% to more than 50 euros per megawatt-hour for the first time in two weeks, as a severe cold storm threatens energy production in the southern United States.

Difficulty refilling European warehouses

LNG terminal flows in the country have already fallen by about 6% from the previous week, according to data from the Bloomberg New Energy Finance News Service.
Early Tuesday, it backed up to an LNG export facility in Freeport, Texas, indicating that the three production units may be disconnected from the transportation network, according to data, for a reason that is not precisely clear.

According to the International Energy Agency, Europe will face more difficulties in refilling warehouses next summer after the peak demand season ends this winter, especially after the complete cessation of Russian gas supplies through Ukraine since the beginning of this year.

Russian supplies stopped

Although the Russian supply disruption does not currently pose a supply risk to Europe, it may increase “near-term pressures” on the liquefied natural gas market, according to the agency’s report issued on Tuesday.
The report assumes that no Russian gas shipments will arrive via pipelines in the territory of Ukraine until the end of the year, with Europe’s needs for liquefied natural gas increasing by more than 15% during the year.
By 5:15 pm Amsterdam time, the price of Dutch futures contracts, which are the standard contracts for the European gas market, rose by 4.4% to 50 euros per megawatt-hour.