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Investing.com - US natural gas prices soared Thursday, boosted by continued chilly conditions as well as opposition to reported plans by the European Union to cap prices.
At 08:40 ET (13:40 GMT), natural gas prices rose 4.1% to $3.710 per million British thermal units, or MMBtu, over 8% higher over the course of the last week.
Gas prices had fallen to a degree during the previous session following a report in the Financial Times which suggested the European Union was considering new powers to temporarily cap EU gas prices, which have recently hit record levels compared with the US.
The European Commission is preparing a package of measures, due to be proposed on February 26, to improve industries’ competitive edge and help bring down energy prices.
However, Europe’s gas and energy trading industries have come out strongly against such a move.
"We believe this measure, if announced, could have far-reaching negative consequences for the stability of European energy markets and the security of supply across the continent," the industry groups said in a letter to Commission President Ursula von der Leyen.
Brussels introduced a gas price cap during the 2022 energy crisis, but this expired after never being triggered.
Additionally, the wintery conditions that have hit many parts of northern Europe as well as part of the U.S. are expected to continue, with Arctic temperatures forecast to persist through late February.
UBS has increased its gas price forecast for 2025 to $3.61 MMBtu from $3.35 MMBtu.
“The key drivers behind the increased near-term price forecasts are: 1) sustained pricing strength through winter on the back of cooler temperatures supporting demand, 2) a faster-than-expected storage drawdown to meet the call on gas and 3) continued discipline by E&Ps as gas activity has not shown signs of significantly responding to the upside,” the Swiss bank said, in a note.
It keeps its 2026 price forecast at $3.75 MMBtu, citing growing LNG exports and, to a lesser extent, rising PowerGen demand as supportive for a favorable forward outlook.