Natural gas prices rising in anticipation of cold snap in Europe
2023.01.31 10:25
Natural gas prices rising in anticipation of cold snap in Europe
By Tiffany Smith
Budrigannews.com – As forecasts indicated that the weather would turn cooler than previously anticipated next week, European natural gas saw a rebound.
March benchmark futures rose as much as 11%. After a warm spell, some models predict that temperatures will drop again. This could increase gas consumption for heating and necessitate more withdrawals from storage sites that are fuller than usual. (NYSE:) Maxar Technologies expects temperatures next week to be cooler in northern and central Europe, but they will still be close to average for this time of year.
Despite the fact that most of the pain has subsided, brief periods of cold weather are keeping the energy crisis alive. The confidence that inflation has passed its peak and that a recession could be avoided is growing, and gas prices are on track for a second monthly decline. However, the weather has been the primary factor, and the market is still sensitive to any indications of an increase in consumption.
Tim Partridge, Zenergi Group’s head of energy trading, stated, “Lower demand for gas, with plenty in storage, had reduced risk up until this point.” However, he stated, “pockets” of colder weather and recent outages are still supporting near-term prices.
At 9:23 a.m. in Amsterdam, it was €60.15 a megawatt-hour, an increase of 9.1%. 8.7% more was added by the UK equivalent contract.
Prices are anticipated to rise as high as €80 in the second half of 2023, according to ING Groep, from an average of €60 to €65. That is still a significant amount lower than the previous year, when gas prices reached all-time highs.
In a note this week, the bank stated, “It certainly isn’t looking as dire as it did just several months ago.” However, two major dangers exist: Chinese demand for liquefied natural gas and a complete halt to pipeline flows from Russia that have already been restricted.
