European natural gas prices surged to a two-year high as new weather models forecast an incoming cold snap across Northwest Europe this week, expected to linger through early next week. Another driver in the rally has been the bloc's dwindling NatGas inventories, which remain well below critical seasonal averages, heightening supply concerns ahead of spring.
The price of the Dutch TTF, the benchmark European NatGas, climbed as much as 5.4% on Monday to 58.75 euros a megawatt-hour - the highest level since February 2023.
According to Bloomberg data, weather models forecast that average temperatures across Northwest Europe will begin sliding this week and reach a low of 29F by early next Tuesday. The average temperature for the region this time of year is around 40F.
The cold blast will increase NatGas demand and further drain stockpiles on the continent, which are already below 15-year averages. As of Saturday, EU NatGas storage facilities were about 49% full.
"The risk of the European Union entering the spring with very low gas inventories has increased in the last couple of weeks," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management, who Bloomberg quoted.
Lohmann noted, "Not only has the front month spiked, but we have also seen a rise in 2026–2027 calendar prices."
Traders also watch the risks of a broadening tariff trade war between President Trump and Brussels. On Sunday, Trump said he would soon introduce a 25% tariff on all steel and aluminum imports into the US.
French Foreign Minister Jean-Noel Barrot responded to Trump's tariff threat, indicating the bloc should not hesitate to defend its interests.
"Of course... This is already what Donald Trump did in 2018, and we responded. We will again respond," Barrot said.
In recent months, Trump has told Brussels to purchase more US LNG...
"Trump could act as the LNG marketer-in-chief," Anne-Sophie Corbeau, a global researcher at Columbia University's Center on Global Energy Policy, said in a recent webinar. However, it remains to be seen how successful he will be in selling more LNG to Europe amid tariff wars.
Since Russia invaded Ukraine in early 2022, Europe has been rejiggering its LNG supplies from Moscow to the US.
The EU may purchase more US LNG to satisfy Trump to resolve any trade disputes.
