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LNG: Gas Remains In High Demand, European Prices Rebound

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European natural gas rose sharply on Tuesday unwinding some of the sell-off driven by hopes of a ceasefire in the Ukraine and easier sanctions on Russian fossil fuels. It is up 3.7% to EUR 49.90, close to the intraday high, but is still down 6.3% this month. Negotiations have just begun between Russia and the US for a peace in Ukraine but with fighting unabated there is a long way to go before there’s a truce let alone the easing of sanctions.

  • US and Russian officials met without Ukrainian representatives and have agreed to further discussions. US President Trump expects to meet Russian President Putin before the end of February. Russia’s foreign minister said that they would not accept NATO troops in Ukraine but Ukraine requires a security guarantee. Meanwhile, the US’ Rubio has said that sanctions won’t be lifted until there is a deal.
  • With a peace unlikely to be imminent, Europe’s storage refilling problem ahead of next winter persists. Futures prices for the spring/summer months are similar to the current March contract and are several euros above late 2025/early 2026 prices. Europe is looking to increase its LNG imports as storage levels are currently around 44%.
  • US natural gas rallied 7.8% to reach the $4-mark driven by freezing weather. Prices are now up almost 32% this month as the weather shifted colder. Record flows to LNG export terminals are also boosting prices.
  • Europe has to compete with other regions for global LNG supplies and Argentina has said that it will begin purchasing early next month for the southern hemisphere winter. It relies on gas for heating. The same time of year may see an increase in gas demand in Asia for cooling. 
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European natural gas rose sharply on Tuesday unwinding some of the sell-off driven by hopes of a ceasefire in the Ukraine and easier sanctions on Russian fossil fuels. It is up 3.7% to EUR 49.90, close to the intraday high, but is still down 6.3% this month. Negotiations have just begun between Russia and the US for a peace in Ukraine but with fighting unabated there is a long way to go before there’s a truce let alone the easing of sanctions.

  • US and Russian officials met without Ukrainian representatives and have agreed to further discussions. US President Trump expects to meet Russian President Putin before the end of February. Russia’s foreign minister said that they would not accept NATO troops in Ukraine but Ukraine requires a security guarantee. Meanwhile, the US’ Rubio has said that sanctions won’t be lifted until there is a deal.
  • With a peace unlikely to be imminent, Europe’s storage refilling problem ahead of next winter persists. Futures prices for the spring/summer months are similar to the current March contract and are several euros above late 2025/early 2026 prices. Europe is looking to increase its LNG imports as storage levels are currently around 44%.
  • US natural gas rallied 7.8% to reach the $4-mark driven by freezing weather. Prices are now up almost 32% this month as the weather shifted colder. Record flows to LNG export terminals are also boosting prices.
  • Europe has to compete with other regions for global LNG supplies and Argentina has said that it will begin purchasing early next month for the southern hemisphere winter. It relies on gas for heating. The same time of year may see an increase in gas demand in Asia for cooling.