The benchmark natural gas prices in Europe and the United States jumped on Monday as forecasts point to below-normal temperatures across most of America and a cold spell in northwest Europe this week.
Europe's benchmark natural gas prices at the TTF hub in the Netherlands surged by 11% early on Monday, and returned above the threshold of $103 (100 euros) per megawatt-hour (MWh), after having traded below that level for most of the past few weeks.
The benchmark gas prices in Europe fell early this month to a four-month low and stayed below 100 euros per MWh as a warm October allowed for more injections into storage instead of withdrawals. The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe postponed the start of the heating season.
However, now the cold spells are imminent, according to forecasts, which will put Europe's ability to survive the winter without gas rationing to the test.
In addition, a fire at the Ã…sgard B platform offshore Norway forced a shutdown on Sunday, and the gas-producing and export platform is expected to remain shut until Tuesday.
Across the Atlantic, the U.S. benchmark prices at the Henry Hub were up by 7.23% at $6.357 per MMBtu as of 9:18 a.m. ET on Monday as the six-to-10 day temperature outlook shows that gas-weighted heating degree days (HDDs) will jump to 179 compared to a normal of 138 HDDs, and much higher than in the previous two weeks.
According to NatGasWeather.com, colder than normal temperatures will cover most of the U.S. over the next seven days to November 20, with rain, snow, and frosty highs of 0s to 40s across the northern U.S., and lows of -10s to 20s. Overall, U.S. natural gas demand is expected to be high to very high in the next seven days.
By Josh Owens for Oilprice.com
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Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and… More
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