Cold snap causes sharp rise in gas prices in Europe

(Patria) - Natural gas prices in Europe rose sharply at the beginning of the year, reaching their highest level in about six months due to a cold snap across the Old Continent and warnings from meteorologists that temperatures could fall again at the end of January.

At the benchmark Dutch TTF digital exchange, one megawatt-hour of gas for February delivery cost 36.63 euros yesterday afternoon, 10.5 percent more than at the close of trading two days prior.

Its price thus reached its highest level since the end of last July.

Last week, gas closed trading on TTF at a price of 29 euros per megawatt-hour, meaning it has increased by just over 26 percent this week alone, the strongest rise since autumn 2023.

Due to the cold snap, European storage facilities are only half full, whereas they have been on average 67 percent full at this time of year so far.

Meteorologists, on the other hand, are announcing that temperatures will fall again at the end of the month, which could lower reserves even further.

Tensions in Iran, an important gas supplier to Turkey, have also affected prices.

Traders' fears of supply disruptions have been fueled by the US government's threats to impose 25 percent tariffs on Iranian trading partners.

Market movements also reflect stronger demand in China, the world's largest buyer of liquefied natural gas, notes the dpa agency.