Sharp rise in European gas prices, partly due to warm weather

European gas prices rose sharply on Friday, partly due to warm weather in much of Europe leading to higher demand for electricity, for example for air conditioners and fans. But signs of increasing competition from Asia for liquefied natural gas (LNG) are also pushing up prices.

On the leading gas exchange in Amsterdam, the price for a megawatt hour rose by 22 percent to almost 33 euros. This week, the price has already increased by 38 percent. This is the first weekly increase since March.

The market threatens to tighten as Asian countries also step up efforts to get LNG due to a heat wave in parts of Asia. In addition, several Norwegian gas fields have been shut down for some time. Norway is the most important gas supplier for Europe.

Late last month, gas prices fell to their lowest level in nearly two years. The drop was caused by mild weather, increased liquefied natural gas imports and gas stocks that were better than expected. Businesses and households also cut back on gas consumption.

Last year, gas prices skyrocketed due to the Russian invasion of Ukraine and sharply reduced gas supplies from Russia to Europe. In August, prices even peaked at over 340 euros.