EU Gas Prices Rise due to Cold, Tensions Middle East

Natural gas futures rose in Europe for a second day as a cold snap approaches the north and tensions in the Middle East raise supply concerns.

Benchmark contracts rose as much as 5.2% to their highest levels in a week, as temperatures across western Europe are expected to fall below seasonal norms in the next few days, boosting demand for gas for heating and burning fuel in power plants.

Concerns about shipping energy supplies on ships passing through the Red Sea resurfaced this week, boosting oil and gas prices. 

Houthi militants claimed to have attacked another commercial ship in the region, while Iran said the explosions that killed nearly 100 people in the central part of the country were carried out to punish it for its anti-Israel stance.

LNG supplies from around the world are also abundant, as are pipeline exports from Norway. An unplanned outage at a Norwegian field overnight is expected to limit flows on Thursday, but the impact is marginal for now.

Gas prices for the nearest month on the Netherlands Stock Exchange, which is the European standard, rose 2.7% to 33.69 euros per megawatt-hour after increasing 7.3% yesterday. The equivalent contract in the United Kingdom rose 3.1%.