European natural gas prices skyrocketed following news that Europe’s largest gas site, the Groningen field in the Netherlands, is due to shut down later this year. This announcement comes at a critical time as Europe gears up for the heating season. The Dutch government’s decision, reported by Bloomberg, was influenced by the escalating risk of earthquakes linked to the field’s operations.
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As the fallout from this decision unfolds, it coincides with a recent surge in European natural gas prices following extended outages at three key Norwegian gas fields until mid-July. Moreover, the arrival of hotter weather and increased cooling needs after subdued industrial gas use put downward pressure on prices earlier this year has left traders apprehensive that the European energy crisis is far from over.
Unsurprisingly, natural gas ETFs are rallying as a result of this news, with ProShares Ultra Bloomberg Natural Gas (BOIL) leading the way, followed by the United States Natural Gas Fund LP (UNG).