Natural gas prices continue to rise as cold, snowy winter weather descends on Europe.
The United Kingdom (U.K.) is being hit with snow and ice, while Nordic countries are dealing with freezing subzero temperatures.
The result is that European natural gas inventories are falling at their fastest rate since 2021, leading to a spike in demand and increase in prices.
Natural gas prices are up more than 2% in early North American trading on Jan. 2. Prices have now risen more than 25% in the past week amid forecasts of cold winter weather in Europe and North America.
The latest uptick led natural gas prices to finish 2024 nearly 45% higher than a year earlier, their biggest annual gain since 2021.
The rise in gas prices has also been driven by a sharp increase in shipments of liquefied natural gas (LNG) over the past 12 months.
The current cold snap across Europe also coincides with the end of the Ukraine-Russia pipeline transit deal, leaving that region without a key source of natural gas supply.
A winter storm that moved across the U.K. in recent days is now passing over Norway and Sweden.
Temperatures in Oslo, Norway’s capital city, are expected to fall as low as -15 Celsius in coming days, while ski resorts in France and Italy are expecting more than a metre of snow in the next week.
The price of natural gas is currently at $3.711 U.S. per million British thermal units.
