Dutch and British gas contracts rose on Monday morning as cold weather is driving up gas demand for heating and is also likely to trigger greater withdrawals from gas storage sites.
The benchmark Dutch front-month contract at the TTF hub was up €0.64 at €31.64 per megawatt hour (MWh), or $10.76/mmBtu, by 08:49 GMT, LSEG data showed.
It marks the highest intraday level in 10 days.
British day-ahead gas prices were 1.25p higher at 82p per therm, while the front-month gas contract lifted by 0.26p to 82.90 p/therm.
"Our outlook today is bullish mainly due to the spike in residential demand driven by the cold spell," said LSEG analyst Yuriy Onyshkiv.
Local distribution zone demand, which largely reflects gas consumption for heating, will almost double in Britain as temperatures drop from 10.5 degrees Celsius last week to 3.34 degrees Celsius this week, he added.
With no additional flows expected from Norway and liquefied natural gas supply already quite robust, the overall system balance should tighten and see gas storages start depleting over the next two weeks, Onyshkiv said.
EU gas storage sites were last 82.02 per cent full, compared with 91.27 per cent at the same time last year, Gas Infrastructure Europe data showed.
Meanwhile, the significant increase in US gas prices at Henry Hub, which have risen nearly 40 per cent over the past month, also posed an upward risk for prices, Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said in a note.
The US is a major exporter of LNG to Europe, linking the two markets.
This meant that Henry Hub could soon set the low for TTF prices, reflecting the level where it will not be economically viable to produce and ship LNG to the EU anymore, Rasmussen said.
Meanwhile, Ukraine secured imports of US LNG via Greece to cover its winter needs from December through to March next year, it said on Sunday.
(Reporting by Nora Buli; Editing by Alison Williams)
