European gas prices rise 1.8% as China returns to LNG market
Natural gas prices climb amid Asian demand and EU’s Russian gas exit.
European natural gas prices rose as much as 1.8% on Monday, rebounding from earlier losses as Chinese firms resumed spot market LNG purchases.
This return to activity ends months of muted demand from Asia and increases global competition for cargoes. The uptick follows a more than 15% decline in European prices since early April, a drop that helped ease the challenge of replenishing storage ahead of winter.
Market pressures are being compounded by scheduled maintenance and unplanned outages on Norwegian pipelines — Europe’s largest gas supplier.
While lower prices had initially boosted optimism about rebuilding stockpiles, renewed international demand and reduced flows now threaten that progress. Storage levels remain well below their five-year average, adding to market tightness.
EU prepares ban on Russian gas
Meanwhile, the European Union is accelerating efforts to end Russian energy reliance. A draft proposal due Tuesday outlines a ban on new Russian gas deals and existing spot contracts, effective by year-end. The move would mark a key milestone in the EU’s goal to eliminate Russian gas imports entirely by 2027, forcing member states to seek alternative suppliers.
Hopes for renewed U.S.-China trade talks and rebounding oil prices — which are linked to some gas contracts — also buoyed sentiment. Dutch front-month futures, Europe’s gas benchmark, were up 1.4% at €33.38 per megawatt-hour in early Amsterdam trading, reflecting growing investor caution amid tightening global supply dynamics.
Recently we wrote that the U.S. Dollar Index (DXY) is caught between conflicting forces this week, softening short-term yields, firming long-term rates, and better-than-expected economic data.
