According to Bloomberg, yesterday, on November 29, European natural gas prices reached their highest level in 6 weeks, with unusually frigid winter weather expected to start eroding gas inventories and outages across the Old Continent. Rotterdam front-month futures, the European benchmark, settled up 7.3% at €132.29 per MWh, the highest level since Oct. 14. The UK equivalent contract price also soared. This situation is something that could have been easily predicted yet in end-Summer. Latest weather forecasts show temperatures starting to drop below seasonal normal across parts of Northern Europe next week, and gas inventories are expected to start declining. This has happened despite European Union and United Kingdom stocks amounted to 1,061 terawatt-hours, at one of the highest levels on record.

The freeze will be the region’s first real test of its energy resiliency amid the ongoing crisis, as mild temperatures so far were mitigating real demand for heating. With Russia cutting most of its gas supplies to Europe due to impossibility to receive payments due to sanctions, the Continent is set to delve further into its stockpiles that it has spent months accumulating.

According to Gas Infrastructure Europe, gas storage facilities are, however, still reportedly about 94% full on average, due to the recent weather and a massive effort to import liquefied natural gas, which is, however, economically challenging. Before the war began in February upended supplies, Russian PJSC company Gazprom supplied about a third of all gas consumed in Europe at deeply discounted rates.

Meanwhile, according to EU energy commissioner Kadri Simson, European Union countries are clearly lacking unity on the issue of a natural gas price cap before an emergency meeting of energy ministers later this month.

However, having said that, in the U.S. the December NYMEX natural gas contract dropped 31.2 cents day-day and settled at $6.712/MMBtu on Monday after falling in Friday’s session. January's ones, which took over as the prompt month yesterday, slid 13.4 cents to $7.196. NatGasWeather said forecasts over the weekend extended warmer trends across the U.S. for the first week of December and showed above-normal temperatures over the southern and eastern portions of the U.S. to the tune of lower 48F (~9C). Additionally, the U.S.’s production topped 101 Bcf (Billion cubic feet)/day on Monday, within 1 Bcf/d of the record level reached earlier this fall.