(Bloomberg) -- European natural gas prices advanced to top €40 a megawatt-hour as outages continued to weigh on fuel flows while the region’s heating season approaches.
The benchmark contract for October delivery added as much as 5.8% on its last trading day before expiry, after gaining nearly 20% this month. Prolonged Norwegian maintenance and strikes at two Australian LNG plants — now called off — triggered volatility even as storage facilities are brimming.
The start of October will mark the beginning of a new gas year — which typically comes with initial withdrawals from storage sites as Europe’s heating season sets in. It’s also the time when some supply contracts within the region are typically renewed.
A further set of capacity cuts were announced Thursday at Norwegian gas facilities, curbing flows from Europe’s top supplier.
“Exports are expected to recover next week however, unless the maintenance program is amended further,” Engie SA’s EnergyScan said in a note. “With mild weather expected early October and steady LNG flows at import terminals, the fundamental picture remains slightly bullish for the prompt with outages providing short-term support. “
Europe is well-prepared for its second winter without much Russian pipeline gas, but remains on high alert for any disruptions to global supply. Reliance on LNG also means potential competition with customers in Asia, if demand rebounds there.
Front-month gas, the October contract, was up 5.4% at €41.425 a megawatt-hour at 1:10 p.m. in Amsterdam. November and December contracts also edged higher.
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