Tight Inventories, Cold Boost Europe Gas Price

“European natural-gas prices extended this past week's rally on expectations of another late-month cold snap boosting heating demand, while inventories remained well below historical averages.

 

In Friday trading, the Dutch TTF benchmark climbed 13% to 37.48 euros ($43.47) a megawatt-hour, for a weekly gain of nearly 30%.

 

"The prospect of cold weather has provided a boost to prices," said Hamad Hussain of Capital Economics. "Short covering by speculative investors may have also helped to exacerbate the scale of price moves."

 

Europe has seen accelerated withdrawals from its gas-storage facilities in recent days, leaving inventories less than 52% full, compared with a five-year average of 67%. Meanwhile, colder conditions in Asia have already lifted spot-market activity, raising concerns over increased competition for liquefied-natural-gas cargoes.

 

"Icy Siberian air is forecast to sweep the continent, pushing heating demand higher and potentially intensifying global competition for LNG cargoes," analysts at ANZ Research said.

 

Asia is also bracing for a blast of cold weather. Temperatures in Beijing and Shanghai could plunge by as much as 20 degrees Celsius by midweek, while Japan issued a nationwide warning for very low temperatures.

 

European gas prices rose earlier this past week on concerns over a potential interruption of Iran's pipeline gas flows to Turkey due to growing unrest in the country, breaking a monthslong trend of muted trading within a range of 27 euros to 30 euros a megawatt-hour.

 

"The rally marks a significant shift in the market after stronger heating demand collided with renewed geopolitical risks," energy analysts at DNB Carnegie said. "At the end of last year, confidence in the region's supply cushion, helped by LNG imports and a mild start to winter, drove net-short positions in European gas to the most bearish levels since early 2020."

 

Those fears have since eased as expectations of imminent U.S. military action against Tehran subsided, reducing the geopolitical risk premium. However, investment funds have already reduced their net short in TTF to 55.14 terawatt hours from 92.76 terawatt hours in mid-December, according to ING commodity strategists.” [1]

 

1. World News: Tight Inventories, Cold Boost Europe Gas Price. Petroni, Giulia.  Wall Street Journal, Eastern edition; New York, N.Y.. 17 Jan 2026: A8.