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Following a warm autumn and a milder start to the winter, a prolonged cold snap will grip most of northwestern Europe later this week to last for most of January and to test Europe’s natural gas supply and energy infrastructure.
Some of the biggest gas-consuming countries, Germany, the UK, and France, will see later this week temperatures plunging to below seasonal averages as freezing weather will settle on most of Europe for most of January, according to weather forecasters polled by Bloomberg.
Northwest Europe will see below-average temperatures next week and at least until January 20, according to forecasts.
The cold weather will put Europe’s energy systems and infrastructure to the test as it will result in higher electricity and gas consumption for heating.
After the latest month-ahead outlooks on European weather were published earlier this week, Europe’s natural gas prices jumped by 5% on Wednesday.
The February Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, had surged by 4.99% at $35.06 (32.10 euros) per megawatt-hour (MWh) as of 12:27 p.m. in Amsterdam on Wednesday.
On Thursday, prices were at $35.69 (32.60 euros) per MWh as of 1:30 p.m. Amsterdam time.
Despite the cold snap expected next week and the surge in prices earlier this week, European gas prices have been on a downward trend for months as high inventory levels across Europe make the market less nervous about supply shortages.
The EU reached its target to fill sites to 90% of capacity months ahead of the deadline on November 1, and hit full storage levels ahead of winter season proper.
European demand has been subdued in recent months due to slowing economic activity, but Europe still needs a lot of natural gas for space heating and power generation.
European companies have been relying more on Ukrainian storage to hold natural gas and withdraw it from there once winter heating demand rose.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.