(Bloomberg) -- Natural gas prices in Europe increased on Wednesday amid risks that the supply situation on the continent will deteriorate.
Europe may struggle to tap liquefied natural gas to replace missing Russian supply as demand in Asia increases, elevating competition for cargoes.
The UK is also considering cutting off interconnector gas pipelines to EU countries under an emergency plan, if the supply situation worsens, the Financial Times reported on Wednesday.
Europe’s ability to cut gas consumption will be a determining factor for the region to fill gas storage sites and prepare for winter. The need to bring down gas use will increase if Russia -- its biggest provider -- further cuts supplies to the European Union in retaliation for sanctions related to the war in Ukraine. The bloc aims to have stocks 90% full by Nov. 1, from about 57% now.
Europe Must Be Ready to Cut Gas Use by 30% in Winter, IEA Says
Weather forecasts pointing high solar energy production in Europe over the next couple of weeks are set to curb the need for gas in electricity generation. Meanwhile, governments from Germany to the UK are using measures to encourage industries and the population to lower energy demand.
Europe will need mild weather to get through the winter with scarce supplies of natural gas, EQT Corp. Chief Executive Officer Toby Rice said in a Bloomberg TV interview.
“We’re going to be praying for a mild winter,” Rice said. “That’s the state of where we are at today.” EQT is the largest US gas producer.
Dutch front-month gas futures, the European benchmark, rose 1.8% to 131.50 euros per megawatt-hour by 8:58 a.m. in Amsterdam.
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