(Bloomberg) -- European natural gas prices rose as Russia’s deep supply cuts are slowing the pace of refilling storage sites, threatening to fall short of the levels required to keep homes warm in the coming winter.
Benchmark futures started the week with a gain of as much as 6.9%. Buyers have found it more difficult to replace Russian gas from elsewhere after its main supplier cut off flows through a major route to Europe by 40% earlier this month. Inventory levels in Europe retreated 1% on Saturday, breaking a run of increases that had taken them toward the 5-year average.
The situation could only worsen with the Nord Stream pipeline -- the biggest link from Russia to the European Union -- scheduled to fully shut for maintenance next month. German Economy Minister Robert Habeck said he can’t be sure that Russia will resume shipments through the link following the works, raising the prospects of a fresh surge in prices and rationing this winter.
Full storages are essential for Europe to get through winter when demand for heating peaks. EU energy ministers will discuss preparedness at a meeting on Monday in Luxembourg, according to diplomats. The European Commission is seeking to present a proposal in July on how the bloc could reduce demand.
Dutch front-month gas futures, the European benchmark, rose 5.1% to 135 euros per megawatt-hour as of 8:38 a.m. in Amsterdam. They rose 9% last week.
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