Natural gas is trading at 35.5 euros per megawatt-hour

European natural gas futures rose by more than 4% on Wednesday, exceeding 35.5 euros per megawatt-hour, which was caused by US strikes in Iraq and new attacks by Houthi militants in the Red Sea. 

This was reported by Trading Economics.

To circumvent the danger associated with the Red Sea, some LNG shipments have changed their routes, choosing longer voyages. Despite this, natural gas prices in Europe are expected to decline by more than 50% in 2023 after rising by 8.5% in 2022 due to persistently low demand, which will allow the region to maintain gas reserves at an adequate level. 

As of December 25, the level of gas storage in the European Union was 87.1%, including 90.7% in Germany, 84.5% in France and 83.5% in Italy. Looking ahead, Northwest Europe is expecting a warm start to 2024 with above-average temperatures, which will lead to lower electricity demand and lower natural gas consumption after the warm December. 

In addition, the challenging economic outlook suggests limited potential for significant growth in industrial consumption in the near future.