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Dutch TTF and UK NBP natural gas prices hit all-time settlement highs on Monday—up 11% as the front-month contract is set to soon expire and the European gas crisis worsens.
The front-month (October) contract TTFV1 was up by €6.635€ MWh on Monday afternoon, to €76.875, pushed higher in part by the contract rolling off this week.
Prices often spike as the contract comes to a close.
The UK’s NBP virtual trading hub for natural gas also hit a record-high price, with front-month contracts reaching an all-time high on Monday afternoon.
The surge in natural gas prices is also due to a massive supply shortage in Europe, a situation that is quickly spilling over into other countries and other markets—including the coal and oil markets as demand for power exceeds supply.
The natural gas crisis is set to intensify as winter heating season approaches, with supplies insufficient to keep up with current demand, let alone build stockpiles for what will be increased demand in the cold season.
Europe’s natural gas crisis has prompted European fertilizer producers to curb output, which could send food prices soaring along with the natural gas prices. It has also sparked warnings of blackouts and factory shutdowns.
If the winter is colder than normal, natural gas supplies could run even shorter, leaving Europeans and possibly other countries, especially those that can barely afford current energy prices, in the cold.
Prices may continue higher tomorrow given the timing of the contract expiration. But according to EBW analysts, warmer October weather may allow natural gas to catch its breath, pressuring gas prices later this week.