European energy prices rose sharply on Monday

European energy prices rose sharply on Monday. The reason is the weather forecasts, which assume low temperatures in the next two weeks, which will increase the demand for heating. The reference gas contract with delivery next month on the Amsterdam ICE Endex jumped by 9.7% to 96.25 euros per megawatt-hour (MWh). In most of Europe, temperatures are expected to be below seasonal averages in the coming months, with the lowest in Scandinavia. In addition, a series of production outages in Norway is likely to reduce gas supplies. With winter approaching, energy markets are increasingly sensitive to rising demand for low temperatures in the northern hemisphere. European gas prices have more than tripled this year. The main reason was weak supplies from Russia, which caused European gas reserves to be the lowest in more than ten years at the beginning of the current heating season. Currently, the tanks are 64% full, while the 10-year average for this period of the year is 86%. Moscow has repeatedly stated that it can supply more gas after the launch of the controversial Nord Stream 2 pipeline. According to some European politicians, Russia is putting pressure on Germany and the European Union to approve the operation of the Nord Stream 2 gas pipeline. "Given the current fragile market equilibrium, any longer period of cold weather below the seasonal average is likely to push the end-of-season gas supply forecasts towards critical levels, which will support price increases," said Stefan Ulrich, an analyst at BloombergNEF. He added that if the winter is extremely cold, further extraordinary measures to calm the gas and electricity markets cannot be ruled out. Cold weather has driven short-term electricity prices in Germany and France to near record levels. The price of December emission permits on the ICE Endex jumped to a record 75.74 euros per tonne.