UK Natural Gas (NFN24) has surged by 17.1% to reach its highest levels since mid-January 2024. This spike in prices has been fueled by a decrease in Norwegian exports to only 323 mcm a day as it competes with European demand. Imports from Norway make up around 40% of the supply, and the threat of outages has sustained prices.
The geopolitical situation is playing a significant role in driving prices, with the ongoing conflict in Ukraine affecting supply routes. Austria’s OMV AG might soon stop payments to Gazprom, potentially cutting off 80% of supplies to the country. This uncertainty is leading to a sharp upward trend in the forward curve, with prices expected to rise further until the end of 2025.
Despite efforts to reduce dependence on Russian gas, countries like Slovakia and Hungary still rely on it for their energy needs. Most of the gas from Russia now enters Europe via Turkey, which has so far avoided sanctions. Storage levels remain stable, but concerns about supply disruptions continue to impact prices.
The market has responded positively to the bullish breakout in natural gas prices, with the contract surpassing key resistance levels. The weekly RSI indicates a positive trend, with prices expected to continue rising in the near term. Overall, the outlook for UK Natural Gas remains optimistic amid ongoing geopolitical tensions and supply concerns.
