• 3 minutes Is California becoming a National Security Risk to the U.S.?
  • 9 minutes Oil Prices
  • 14 minutes Gaming the Price of Oil
  • 30 mins Could EVs Become Cheaper than ICE Cars by 2023?
  • 11 hours DOW down as tech shares plummet
  • 2 hours MBS Isn't Going Anywhere
  • 9 hours Black (Oil) Market: U.S. Sanctions Russian Companies to Choke Off Oil for Syria
  • 9 hours Santa Drives A Tesla, Not a Sleigh-- I KNEW IT.
  • 1 hour Can U.S. Add "Another Russia" to Oil Supply?
  • 2 hours Regular Gas dropped to $2.21 per gallon today
  • 4 hours France Revolts Against Anti - Carbon Tax
  • 8 hours Why does US never need to have an oil production cut?
  • 6 hours Your idea of oil/gas prices next ten years
  • 10 hours Plastic Myth-Busters
  • 13 hours EVs Set to Become the Biggest Battery Users
  • 12 hours Fishermen Sue Oil Companies Over Rising Ocean Temperatures
Alt Text

The Trojan Horse In Oil Markets

Iran sanctions have been at…

Alt Text

Oil Rebounds On Hopes Of OPEC+ Action

Oil prices rebounded on Friday…

Alt Text

Oil Majors Win Big In Midterms

The energy industry won quite…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

Europe’s Natural Gas Prices Surge To Record For Summer Season

Europe’s natural gas market is the most bullish it has been in years, as higher-than-expected summer demand and a tighter market drive natural gas price futures to levels last seen during this past winter’s supply crunch and to the highest for a summer season.

Natural gas prices are expected to stay strong and may still have room to rally, ahead of the next winter heating season in Europe that begins in October, analysts and traders tell Bloomberg.  

Contrary to the typical summer lull in Europe’s gas prices, this year the front-month gas price in the UK—Europe’s biggest gas market—for example, is nearing the winter price from December 2017 when a deadly explosion in Austria’s gas hub at Baumgarten squeezed supplies throughout Europe. Immediately after the explosion, the price of gas for immediate delivery in the UK reached its highest level since 2013.

The past winter season in Europe was one of the coldest this decade, sending gas demand soaring and the level of natural gas stored in tanks across Europe dropping to below average levels.

Russia—which already supplies around one-third of Europe’s gas—boosted deliveries in the winter, and continued to ship higher volumes even after that, as gas importing countries were replenishing gas storage supplies that had been drained amid the cold snaps.

Come spring, demand in Europe stayed high. First, because gas storage levels were low, and second—because some of Europe’s other traditional gas-supplying countries decreased supplies over issues or maintenance at facilities.

Related: Venezuela Takes Unprecedented Action To Stabilize Currency

Then summer came and with it a prolonged scorching heat wave across most of Europe for most of July and August. Demand for gas jumped again amid a tighter market and spot cargoes of liquefied natural gas (LNG) going mostly to Asia—China in particular—as sellers profit from selling their LNG on the Asian market where prices are higher than Europe’s.

China’s LNG demand is attracting LNG cargoes and Northwest Europe these days serves as a terminal for transfer of LNG for re-export to the Asian markets. Although the UK benchmark gas price is at its highest for this time of the year, Asian spot prices are even higher, so LNG spot cargoes go to the higher bidder. Spot prices in Asia are also pushed up by a heat wave there—record high temperatures in Japan have led to strengthened East Asia spot LNG prices over the past month as Japanese and South Korean utilities were back on the market looking for spot September and October cargoes to refill storage before winter comes, Alex Froley, LNG Analyst at ICIS, said in a note this week.

With Asia snapping up LNG supplies, European gas markets stay tight, with demand high and natural gas storage levels low and in need of replenishing before winter comes. Further boosting gas demand is utilities across Europe seeking more gas-fired power generation because the prices of EU carbon dioxide (CO2) emissions allowances under the EU Emissions Trading System surged to a 10-year high, so utilities prefer to use more gas-fired power generation at the expense of the more emission-intensive and polluting coal.

Related: The Next Major Challenge For Norway’s Oil Industry

Another side effect of the heat wave across Europe also helped boost gas demand. In France—which depends on nuclear power for around 75 percent of its electricity demand—EDF had to halt for some time four nuclear reactors at three power plants because of high temperatures of the Rhone and Rhine rivers whose waters are used by the nuclear facilities for cooling.

The hot summer in Europe has also been hot for natural gas prices that have never been so high for this time of the year. According to traders and analysts surveyed and briefed by Bloomberg, the gas price rally will likely continue in view of the coming winter, unless there is unexpected lower demand in the winter or an oversupply of natural gas.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment
  • rjs on September 10 2018 said:
    how can you write an article about record natural gas prices and not once say what they are?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
-->