Investing.com – European wholesale natural gas prices surged on Tuesday, as a looming summer heatwave stoked fears of heightened power-sector demand amid unexpected infrastructure maintenance in Norway.
gained 4.7% to trade at 46.54 per megawatt-hour, clawing back losses from a muted Monday session.
In the United Kingdom, mirrored the rally, jumping 5.1% to 111.00 pence per therm.
An intense heatwave is poised to blanket parts of Northwest Europe and Italy over the coming fortnight. The spike in mercury is expected to significantly increase electricity demand for air conditioning, forcing gas-fired power plants to ramp up generation.
On the supply side, gas flows from Norway – now Europe’s single largest pipeline provider – edged lower following un-scheduled extensions to seasonal maintenance at the Nyhamna processing plant and the Troll gas field.
Compounding the immediate weather anxieties is the slower-than-usual seasonal injection rate into the continent’s underground storage facilities.
According to the latest data from Gas Infrastructure Europe (GIE), European gas storage facilities are currently 43.1% full. While this meets seasonal regulatory mandates, it sits well below the 51.4% storage levels recorded at the exact same juncture last year.
Analysts note that competing liquefied natural gas (LNG) demand from Asia has consistently drawn flexible spot cargoes away from European ports this summer, keeping regional prices volatile and highly dependent on steady pipeline flows.
For the remainder of the week, market participants expect prices to remain elevated as long as weather forecasts hold hot, though any signs of a swift recovery in Norwegian gas nominations could limit further dramatic gains.