The benchmark for European natural gas prices - the September natural gas futures price with the highest trade volume on the Dutch TTF exchange - once rose to 42.86 euros/MWh, reaching the highest level since early December of last year.
On Monday (August 12), during the European period, the price of natural gas futures for September with the highest trading volume of the Dutch TTF benchmark, has risen to 42.86 euros/megawatt-hour, reaching the highest level since early December last year.
Source: Intercontinental Exchange
Under the influence of this factor, the one-year electricity prices in Germany and France also rose, with German electricity prices soaring to more than 100 euros/megawatt-hour - the first time since June 3, and French electricity prices reaching their highest intraday level in two months.
Since the outbreak of the Russia-Ukraine conflict in 2022, most EU countries have been free from Russian pipeline natural gas, but some countries, especially Austria and Slovakia, still depend on this supply.
At the same time, the market is also paying attention to the large-scale maintenance of Norwegian facilities starting at the end of August, which may lead to a reduction in supply from the country. Currently, Europe and Asia are vying for liquefied natural gas (LNG), which could intensify market tension.
At present, Europe is in a critical reserve season, and higher local natural gas prices may attract more supply from the United States. Last month, the competition between Europe and Asia in liquefied natural gas was already very fierce. In Asia, the heat wave has boosted the demand for natural gas power generation.
Tom Roberts, CEO of London-based energy data analysis company Xterna Group, said, "Last month, China and Japan both experienced heat waves, and both countries responded by increasing output." Under this pressure, Europe's natural gas supply may quickly dry up.
S&P Global Commodities Insight said that the demand for liquefied natural gas in Asia is slightly weak this month, partially due to the cooler weather and increased geopolitical risks in the Middle East, which is changing the profit potential of LNG transportation routes, "This opens up potential for more US LNG to be delivered to Europe."
Roberts added, "Now, a big problem in front of us is the upcoming winter. The current focus seems to be on overall geopolitics, but some major natural gas consuming countries are consuming natural gas at a record pace."