European Gas Rises Again as Countdown to Heating Season Begins

(Bloomberg) --

European gas futures extended gains as supplies remain stubbornly low just two days before the region’s official heating season starts.

Concerns remain over flows from Russia after a colder and longer winter depleted the continent’s stockpiles to the lowest in more than a decade for this time of the year. Supply through a major transit route from the country to Germany’s Mallnow have partially recovered from Tuesday’s drop, which Gazprom PJSC said was because a customer asked to receive less. 

Gas futures on the Dutch Title Transfer Facility hub increased as much as 8.8% to 85.47 euros per megawatt-hour, near Tuesday’s record high. The U.K. equivalent benchmark gained as much as 8% to 211 pence per therm. 

High gas and power prices in Europe have already forced some fertilizer and other industrial facilities to shut, and a number of U.K. energy suppliers have also gone bust. TotalEnergies SE Chief Executive Officer Patrick Pouyanne said the region’s gas crisis is likely to last all winter as stockpiles are lower than usual, while Rabobank warned that a cold winter will leave global storages practically empty.  

“This would be a catastrophic scenario which the market is trying to solve for now by increasing prices so much that demand is forced to ration,” Rabobank said in a note. 

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