European energy markets surged to historic highs on Tuesday after much-depleted stockpiles, indicating that the supply constraints could worsen amid the winter season.
- Dutch natural gas futures soared up to 12.2%, carbon futures by 2.2%, along with German electricity for the coming year, and UK gas, which hit record-highs. Brent crude traded above $80 for the first time in nearly two years, with northeast European coal prices at a pandemic high.
- The rally comes amid a gas shortage as stockpiles have dwindled due to the cold and long winter, bringing inventories to a decade-low. Researchers believe Europe’s storage levels could reach 2.5 billion cubic meters by the end of March, 3.8% below full capacity.
- Traders say it is still difficult to make forecasts as the gas market remains tight, and movement will depend on winter conditions. A colder winter is expected to continue to push prices higher.
Norwegian grid operator Statnett SF also warned that southwest electricity supplies are pressed due to low inflows.
ESIE is up 1.80%