Investing.com -- European natural-gas prices have surged back to 50 euros per megawatt-hour, marking the highest level since the first trading day of the year. This price hike is attributed to the freezing weather in Texas, which poses a risk to U.S. liquefied natural gas (LNG) exports.
The sudden increase in prices seems to have been triggered by an outage at the Freeport LNG export terminal in the U.S., according to analysts at ING. The cold spell in Europe has further added to the supply concerns.
The analysts noted that Europe needs to import more LNG this winter due to the disruption of Russian pipeline flows through Ukraine, coupled with a spike in demand. They further stated that the European Union's gas storage has now dropped to 59%. The region is now striving to keep it above the European Commission’s target of 50% full by February 1.
At present, the benchmark Dutch TTF contract is trading 0.8% lower at 49.64 euros a megawatt-hour. This situation underscores the delicate balance of supply and demand in the region's energy markets during the winter months.
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