European Gas Prices Fluctuate Amid LNG Surge And Arctic Blast

Record LNG imports helped offset a snowstorm that tested Europe's energy crisis endurance.

High prices have boosted LNG shipments into northwest Europe in recent weeks. As heating demand rises, the continent is simultaneously trying to save natural gas.

In the coming days, London to Latvia will see subfreezing temperatures. It's Europe's first significant test of the season after Russia cut gas supplies because of Ukraine. Wind power declines and nuclear outages strain Sweden's and France's energy and gas networks.

Wood Mackenzie's vice president for gas & LNG research expects two-thirds of US LNG shipments to arrive in Europe this year. The biggest impediment to US LNG shipments to Europe is regasification infrastructure.

Despite a dip from 96% in mid-November, Europe's gas storage levels remain at 90%. Recent cold has increased Norway's facilities outages.

During nuclear plant closure, an Arctic blast will test Sweden's power grid.

Traders are also watching developments in China, where Covid-related laws are being loosened. A freeze in Asia might increase LNG competition.

"Germany has one of the highest LNG prices, which has helped attract cargoes," said EnBW's Peter Heydecker. We expect enough LNG to come, but things might change rapidly and we must watch Asia's demand.

Dutch front-month futures rose 1% to €150.80 per megawatt-hour at 13:33 in Amsterdam. UK contract climbed 1.3%.