European natural gas prices are trading sharply after the extension of outages at three major Norwegian plants. Gas futures for July delivery show a daily increase of over 12%, marking a turnaround with respect to the previous negative trend.
The disruptions will affect major facilities such as Ormen Lange, Nyhamna and Aasta Hansteen, according to network operator Gassco AS. The plants that will now remain offline until mid-July.
These moves indicate that the market remains sensitive to supply shocks, with traders balancing falling industrial demand and high inventory levels ahead of winter.
While higher-than-average storage levels have at times provided a sense of security for Europe ahead of next winter, traders appear to be bracing for the possibility of a tighter market, with prices higher than earlier this month .
Bernstein analysts predict that Europe will enter next winter with gas stocks full, but set to fall 48% by the end of the season, below the levels recorded earlier this year. Citigroup analysts expect third-quarter prices in Europe and Asia to average about 50% below current levels.