The Jump in Natural Gas prices in Europe is Due to the Adversities in Norway and Asia

Thus, Norway has cut its production and exports due to technical problems at a number of projects, while hot and dry weather has set in quite early in Asia, which resulted in hydropower plants generating less electricity. In addition, there is an increase in demand as the air conditioning season has started.

On Monday, June 3, the Dutch TTF hub gas price rose 12.79% to reach $439 per thousand cubic meters, the highest since December 8, 2023. Today, on June 5, the price is $420.30 — still looking elevated.

Earlier, the International Monetary Fund (IMF) predicted a sticky trend of rising energy prices in Europe. According to the think tank’s experts, the region's energy security may weaken even more profoundly, and the EU economy will become increasingly sensitive to difficulties with the supply of gas and other hydrocarbons.

European gas prices surged multiple times in 2022 with all instances a reflection of concerns over lower supplies from Russia, the main source of gas imports to the continent. Russian gas dependence in Europe is particularly high among Eastern and Central European countries. Throughout 2021, Russia exported less gas than in previous years, with the objective to restock depleted storage volumes at home. This directly affected electricity prices, as gas is a major contributor to EU power production, it being the second-largest source for electricity generation.