Natural gas prices in Europe rose to the highest level in almost two weeks amid risks that the supply situation could deteriorate as countries race to fill storage sites.
Benchmark prices in the Netherlands extended gains to as much as 10pc after Norway's Martin Linge field reduced capacity due to a compressor failure. The July contract, which expires on Wednesday, settled about 8pc higher at €139.59 a megawatt-hour.
The continent may also struggle to tap liquefied natural gas to replace missing Russian fuel as demand in Asia increases, elevating competition for cargoes. And the UK is considering cutting off interconnector gas pipelines to European Union countries under an emergency plan, if the supply situation worsens, the Financial Times reported.
"Among market participants, growing concerns on the weakening of storage injections in the past days seem to prevent prices from falling," EnergyScan, Engie SA's market analysis division, said in a note.
Europe is rushing to tap alternative energy resources and reduce demand as it shuns top-supplier Russia amid increasing tensions related to the war in Ukraine. Russia cut gas flows by 60pc via an important route earlier this month, citing technical issues, and previously halted supplies to several EU countries over a payment dispute following European sanctions.
The bloc's ability to curb consumption will be a determining factor for it to fill storage sites and prepare for winter. The EU is currently on track to have stockpiles 90pc full by November 1, though a halt in Russian flows would cut this figure to below 75pc, Energy Commissioner Kadri Simson said this week.
Europe's efforts to find alternatives may be limited by a heatwave in Asia, which is prompting energy companies in Japan to rush for available LNG cargoes. Separately, a workers strike has halted loading at Shell’s Prelude LNG export facility in Australia, exacerbating the global fuel shortage.
The world is heading for a "turbulent period" as tightening supplies of LNG and oil deepen a global energy crunch, according to Shell CEO Ben van Beurden.
"There will be more LNG supply coming into Europe, but will there be a lot of extra new LNG supply to plug the gap? I don't think so," he said.
Meanwhile, weather forecasts point to high solar energy production in Europe over the next couple of weeks, which is set to curb the need for gas in electricity generation.