Rabobank's RaboResearch Team has noted a rally in European gas prices, which reached €43/MWh due to below-average storage levels and severe cold weather. The report indicates that this price movement has been amplified by financial positioning, with investment funds shifting to a net long position. The analysis suggests that while current fundamentals are tight, broader geopolitical risks could impact market trajectories.

Cold weather tightens gas market

"Below average European gas storage levels, combined with an unexpected severe cold spell and temporary freeze offs at several U.S. shale basins, pushed European gas prices back to €43/MWh on 23 January—the highest level in seven months."

"The price rally, however, has not been driven solely by fundamentals. Financial positioning amplified the move: investment funds shifted from a net short stance in December 2025 to a net long position within a matter of weeks as short term supply risks increased and weather forecasts turned decisively colder."

"Nevertheless, once winter seasonality fades and U.S. LNG export capacity expands meaningfully over the course of 2026, the structural outlook for European gas remains more bearish."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)