European Gas Prices Hit Two-Year High as Supply Fears Intensify

(Bloomberg) -- European natural gas prices rose to a two-year high as colder temperatures accelerate the depletion of the region’s storage facilities. 

Benchmark futures rose as much as 5.4% on Monday to €58.75 a megawatt-hour. That’s the highest since February 2023, after contracts posted four consecutive weeks of gains.

Northwest Europe is bracing for freezing temperatures in the coming days, which could boost heating demand and add impetus to the rally that’s dominated the year so far. Higher fuel consumption risks draining stockpiles further, which are already at their lowest for this time of year since the energy crisis in 2022. 

Chilly and low-wind conditions across Europe have boosted gas consumption this winter and weighed on renewable generation. Inventories are only 49% full compared with 67% at the same time last year, making it harder to replenish them during the warm months.

“The risk of the European Union entering the spring with very low gas inventories has increased in the last couple of weeks,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management. “Not only has the front month spiked, but we have also seen a rise in 2026–2027 calendar prices.”

Meanwhile, traders are set to gather in Essen, Germany, this week for an annual event to discuss the market developments. In addition to the weather, they’re keeping a close eye on the impact of US tariffs and possible retaliations, which risk making liquefied natural gas imports more expensive. Norway’s upcoming summer maintenance season may also cap supplies at a time when the market is already tight.

Gas consumption in Europe is expected to rise by 17% this month from a year ago, driven by residential and commercial demand, according to a monthly outlook from ICIS. It forecasts that inventories will be 37% full by the end of winter.

Dutch front-month futures, Europe’s gas benchmark, rose  to € a megawatt-hour at 10:00 a.m. in Amsterdam. Traders are also rushing to snap up protection against surging European gas prices, signaling they expect further disruptions to supplies.

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