European natural gas prices rose as flows from top supplier Norway plunged amid a fresh bout of planned maintenance and concerns over storage refills for the winter continued to mount.
Benchmark futures gained as much as 2.5% on Thursday as the Kollsnes gas processing plant in Norway began its seasonal works. The Nordic nation accounted for about a third of the European Union’s imports last year.
Traders are focused on securing supplies to refill the region’s depleted storage sites, while attention is also on geopolitical developments around US tariffs and the so far stalled efforts to end Russia’s war in Ukraine.
In Germany, energy company Uniper SE said its Breitbrunn gas storage facility — the fourth biggest in the country — will not achieve the national goal of 80% full ahead of next winter due to unfavourable market conditions. The next auction is scheduled for June 12.
Hot weather in other parts of the world could also boost demand for the fuel and tighten competition for global supplies. Still, weak demand in China is supporting liquefied natural gas flows to Europe for now.
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“The supply of liquefied natural gas to Europe’s networks is mounting, helping close a significantly wider year-over-year storage gap,” Patricio Alvarez, an analyst at Bloomberg Intelligence, said in a note. European gas prices are likely to remain at about EUR35 ($51.30) a megawatt-hour through this year, he said.
“Relaxed storage targets, weak domestic demand and subdued LNG imports in China are easing supply pressure even as near-term output from US LNG and Norwegian gas slows due to maintenance,” Alvarez said.
Dutch front-month futures, Europe’s gas benchmark, added 1.9% to EUR36.28 a megawatt-hour at 1.42pm in Amsterdam.
