European natural petrol rose as traders turned their attention to forecasts for hotter-than-usual weather next month, which likely will stimulate demand at a time when supply risks remain.

Benchmark futures settled 7.9 per cent higher, with more facilities in top provider Norway undergoing prolonged maintenance. That coincides with some models showing a return to above-normal temperatures in the north-west region after brief relief during the next few days.

“The focus seems to shift more strongly on weather forecasts for July, where temperatures above the norm across Europe could potentially increase energy demand for cooling purposes,” Energi Danmark said in a note.

Adding to supply concerns, the impact of a planned outage at the major Kollsnes petrol-processing plant in Norway starting on Thursday (Jun 29) has been increased, according to network operator Gassco. Europe is also vulnerable to disruptions at global liquefied natural gas (LNG) facilities, as customers became more dependent on the super-chilled fuel after Russian pipeline gas deliveries dwindled.

Flows to Cheneire Energy’s Corpus Christi LNG plant in the US declined on Tuesday, potentially indicating an issue at the facility. American suppliers have been crucial in filling any gaps in Europe since the war started in Ukraine. 

Total LNG arrivals to the continent are well above seasonal norms, even though they have slipped in June. Inventories are far fuller than average, providing a safety net against supply interruptions.

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Dutch front-month petrol, Europe’s benchmark, rose to 34.51 euros (S$51) a megawatt-hour. The UK equivalent contract added 6.8 per cent.

“The front month has found some support at the 30-euro mark and is having trouble recently getting back below, even this far out before winter,” said Tim Partridge, director of energy markets at utilities consultancy Eyebright.

So far this year, Europe’s power consumption is subdued despite the lower prices, BloombergNEF (BNEF) said in a note on Monday. During the first six months, it’s been 7 per cent below BNEF’s seasonally adjusted model, which predicts demand based on actual temperature levels, it said.

Clean energy generation is growing, with renewables surpassing power output from fossil fuels last month following rapid capacity expansion, the analysts said. BLOOMBERG