Europe’s LNG prices rise as winter approaches

With a wave of cold weather set to boost demand and test the region s preparedness for the winter, natural gas prices in Europe increased.

The benchmark futures rose as much as 5.2% to the highest level since Oct. 13. After a relatively mild November, temperatures across Europe will likely plummet this month, and conditions could be cooler than average, according to Maxar Technologies Inc. and Marex.

A cold winter could leave the continent exposed to further supply squeezes after Russia cut off most piped gas flow over the summer. The stockpiles are starting to decline because of the liquefied natural gas, which has helped replenish the missing shipments and fill reservoirs. Inflation and the economy are being hurt by the fact that gas prices are four times higher than normal for this time of year.

Europe is trying to speed up building infrastructure in order to receive more LNG, with Germany expected to have its first import terminals ready this month. Demand in the region could surge and increase competition for cargoes, which could lead to higher prices if a cold snap hits Asia.

China's appetite for LNG has been limited despite a tepid economy and elevated international prices making cargoes less attractive. The LNG imports have fallen 22% until October.

Dutch front-month futures, the European benchmark, were 4.5% higher at €153 per megawatt hour at 8: 25 am in Amsterdam.

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