European natural gas prices are expected to soar 20% in just one week, as the "perfect storm" disrupts market sentiment.

European natural gas prices are expected to see the largest weekly increase in over two years, as unusually cold weather prompts traders to cover short positions, signaling a shift in market sentiment. This week, benchmark futures are expected to rise by over 20%, breaking out of a narrow trading range that has lasted for months. This increase marks a significant shift in market dynamics, as strong heating demand and renewed geopolitical risks combine to create a cumulative effect. At 10:02 Amsterdam time, European natural gas benchmark futures for the nearby month in the Netherlands rose by 4.7% to 34.73 euros per megawatt-hour. The weekly increase is expected to be the largest since October 2023.