On November 21, 2024, natural gas markets saw a significant increase in prices, both in the United States and Europe. These developments, although converging in terms of trends, find their origins in very different contexts. In the United States, atypical weather conditions played a central role, while in Europe, geopolitical tensions exacerbated an already fragile situation.
The United States: when the weather dictates the law of the market
The United States is experiencing a marked climatic turnaround. After an exceptionally mild fall, forecasts indicate a sharp drop in temperatures in the Midwest and West as early as December. The move triggered a 5.10% rise in U.S. natural gas futures, hitting $3.356, the highest since November 2023.
Eli Rubin, an analyst at EBW Analytics Group, points out that this surge also has a speculative aspect. “Many traders, after having bet on a prolonged drop in prices, now hedge against a sudden rise in prices,” he explains. However, American stocks, currently at record levels, could cushion these fluctuations in the medium term if weather conditions soften.
Europe: an incandescent geopolitics
In Europe, the context is quite different. The price of the Dutch TTF, the European benchmark, climbed 3.22%, peaking at 48.303 euros per megawatt hour (MWh), a level also unequaled for a year. The main cause? Geopolitics. Russian giant Gazprom recently suspended its deliveries to Austria, highlighting European dependence on this energy source.
This decision comes in a tense climate between Russia and the West, aggravated by the use of long-range missiles in Ukraine. This dynamic reinforces concerns about energy supply, which is particularly critical as winter approaches.
Comparison of the American and European markets
| Postman | UNITED STATES | Europe |
|---|---|---|
| Main cause | Weather conditions | Geopolitical tensions |
| Current price | $3.356 per million BTU | 48,303 euros per MWh |
| Stabilizing factor | Historically high stocks | Diversified sourcing strategies |
| Future risks | Return to milder climatic conditions | Escalation of Russian-Western tensions |
The regionalization of the gas market makes responses to crises very disparate. If in the United States, an increase in production could calm things down, in Europe, the solution involves an accelerated diversification of supply sources. However, the latter remains hampered by complex logistical and geopolitical constraints..
Current fluctuations are a reminder of the crucial importance of anticipating climatic and geopolitical risks to stabilize markets. But in the short term, consumers risk feeling the full force of this volatility.
