Hot weather and limited supplies helped drive European natural gas prices to a 12-year high late last week in a rally that continued Monday.

The prompt Title Transfer Facility (TTF) contract closed Friday at $10.237/MMBtu and finished higher on Monday at a level not seen since 2008.

European gas prices have been strong since the beginning of the year. Storage inventories were at 44% of capacity on Monday, about 23% below the five-year average and at their lowest level since 2018. 

Strong natural gas demand in Asia, where prices are at a premium, has continued to pull liquefied natural gas (LNG) cargoes away from Europe. Norwegian pipeline imports have been cut due to seasonal maintenance, while work at LNG import terminals continues. Maintenance at the Dunkirk receiving...