European LNG prices rise sharply as cold snap hits Northern Europe

European LNG prices climbed to a new ten-week high of $33.22 Dec. 6 as forecasts for a looming cold snap boosted demand.

The Platts DES Northwest Europe assessment is now equivalent to TTF minus $9.60/MMBtu, up from TTF minus $12.70 a week ago, as LNG prices start to catch up with rising natural gas prices.

The last time the DES Northwest Europe assessment surpassed this level was Sept. 29, when it stood at $35.496/MMBtu.

The rise has occurred as Northern Europe faces freezing temperatures for the next two weeks as cold air from the Arctic is set to sweep across the region, with an expected jump in heating demand. This will likely add significant pressure to the region's already stretched energy infrastructure.

Nordic countries will bear the brunt of the cold snap, with temperatures across Scandinavia having already fallen significantly since the week ended Dec. 3. Meanwhile, temperatures in northern Germany and Poland are also forecast to drop sharply, according to BBC weather, with Hamburg falling from a high of 3 degrees Celsius Dec. 7 to minus 1 C by Dec. 13 and Gdansk declining from 2 C Dec. 7 to minus 2 C Dec. 10.

Colder temperatures have seen market sentiment strengthen in Europe, with EU gas storage levels declining to 90.9% full, according to Aggregated Gas Storage Inventory's most recent data from Dec. 5. Storage levels were previously at over 95% in mid-November as Europe ramped up stocks ahead of the winter.