EU spot natural gas prices rose above $1,350 per thousand cubic meters during trading on Tuesday, a jump of 11%, according to data from the London Intercontinental Exchange (ICE).
Gas futures for December delivery at the TTF center in the Netherlands opened up 6.9% at $1,294 per thousand cubic meters, then rose to $1,344.
Experts cite fears of a cold snap and problems with gas supplies from the continent’s top exporter, Norway, as factors driving up energy costs. Natural gas prices have been falling throughout October and early November as a heat wave delayed the heating season, providing a respite for struggling European economies.
After a long period of unusually mild weather, temperatures will drop below average towards the end of the week, with Berlin expected to dip below freezing, according to meteorologist Maxar Technologies. That means people will start using space heaters, which will increase the demand for gas.
Worries about winter supplies have gripped the EU for months, spurring efforts to hoard fuel. Data from Gas Infrastructure Europe shows that the continent’s gas storage sites are 95.5% full.
Economists, however, warn that the risks remain high as global supplies are tight. They point out that despite the recent drop, the price of European gas is about four times higher than normal for this time of year. Analysts say next year could be even more difficult as replenishing inventories is likely to be more difficult without Russian supplies.
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