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Colder Weather Forecasts Jolt Gas Prices In Europe

Gas prices in Europe rose on Tuesday as cooler temperatures in most of Western Europe are expected at the beginning of November.

The gains were modest, however, as this week’s weather in the UK and most of Western Europe is expected to be mild, according to Refinitiv Eikon data cited by Reuters.                            

Next week, colder weather is expected, according to two reports quoted by Bloomberg.

Power prices for next month in France and Germany rose on Tuesday, with the German power price at its highest level since early last week.

Although European and UK gas prices are off the recent records seen at the start of this month, concern about gas supplies with colder weather in the coming weeks continues to prevail on the market. Europe’s storage facilities are 77 percent full—the lowest levels of gas in storage in a decade, while Russian gas supplies have not materially increased.

Russia could immediately increase natural gas deliveries to Europe as soon as German authorities approve the Nord Stream 2 pipeline, the Financial Times reported last week, citing President Vladimir Putin as saying gas can be delivered “the day after tomorrow” if approval was granted “tomorrow”.

Meanwhile, the EU energy ministers held a meeting on Tuesday to discuss the jump in energy prices and possible mitigating measures at the national and EU level.

“Several ministers called on the Commission to clarify the role of natural gas and nuclear energy in the EU taxonomy for sustainable finance,” the EU said in a statement after the meeting.

Ministers discussed possible medium and longer-term options, including voluntary joint purchase schemes for gas and EU-level solutions for storage.

On this latter issue, EU ministers have so far failed to reach any agreement.

“We will need to assess the advantages and the drawbacks of such a system,” EU Energy Commissioner Kadri Simson told reporters after the meeting, as quoted by Reuters.  

By Tsvetana Paraskova for Oilprice.com

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