(Bloomberg) — European natural gas prices rose as strikes in France that are prolonging outages at the nation’s energy infrastructure increased worries about supply.
Nuclear reactor availability in the country has dropped to 57%, driving up local power prices. The strikes have also hit oil refineries and liquefied natural gas import terminals. A short cold spell is passing through Europe this week, adding to the frequent chilly bouts that are keeping gas prices above normal levels for the time of year. Benchmark futures rose as much as 5.5% on Monday.
Still, Europe has successfully managed to ride out the energy crisis that at one time had threatened to bring major shortages. The official end of the heating season is just days away, and gas storage sites have already started replenishing, with Italy and Germany leading the way. LNG imports also remain strong.
“Further dated gas contracts are trading upwards as concerns over delays in the French nuclear maintenance program builds amid ongoing French strikes causing energy security confidence to dwindle,” consultant Inspired Energy said in a note.
Dutch front-month futures, Europe’s gas benchmark, was 3.8% higher at €42.65 a megawatt-hour at 12:52 p.m. in Amsterdam. Contracts for deliveries through the summer also rose. UK gas for April increased 5.6%.
Strikes may hit oil and gas production in the UK from later this month through to early June as workers plan a series of stoppages in a dispute over pay and conditions.
Buyers in Europe are also closely monitoring some project maintenance in the coming days in Norway. They will also look at progress of the Freeport LNG export plant in Texas, a major supplier to the continent before it was halted last year after a fire. The project recently resumed operations, but canceled at least one cargo this month following another technical glitch.
—With assistance from Elena Mazneva.