(Bloomberg) -- European natural gas headed for the biggest weekly gain in two months, with colder weather set to bear down on much of the region.

Benchmark futures are poised to end the week more than 6% higher, the biggest such jump since early December. Cooler temperatures, forecast for southern and central Europe, would boost consumption of the fuel. 

The continent has so far made it through a relatively mild winter without significant gas-supply disruptions, after Russia severely cut shipments in the aftermath of its invasion of Ukraine. Imports of liquefied natural gas, a rebound in Norwegian flows, and ample stockpiles have helped to ease Europe’s energy crisis. 

Still, there are signs that a tighter market may be emerging. German households and businesses saved too little gas in the second half of last month, the country’s network regulator warned. 

Recently low prices — at least compared to some of the levels seen within the past year — have also encouraged buying interest in eastern Europe, including Lithuania.  

Demand from Thailand, South Korea and India has “provided some opportunity for traders to re-optimize cargoes,” said Tobias Davis, head of LNG for Asia at broker Tullett Prebon. “However, with China and Japan remaining quiet in the spot market, we continue to wait for further signals.”  

Dutch front-month futures, Europe’s gas benchmark, rose 2.9% to €58.70 a megawatt-hour by 12:44 p.m. in Amsterdam. The UK equivalent contract jumped by 4%. 


©2023 Bloomberg L.P.