The fear of an escalating trade war is pushing the price of natural gas to the highest level in fifteen months.
On the leading Dutch futures market, gas prices rose by more than 2% on Monday, reaching nearly €55 per megawatt-hour.
The market is concerned that a trade war could spill over into the gas market. US President Donald Trump has imposed tariffs on imports from Canada, Mexico, and China, and has also announced plans to impose tariffs on European products.
The European Union has responded, indicating it will retaliate. Previously, Trump urged the EU to buy more American oil and gas to avoid tariffs.
The US is the largest supplier of liquefied natural gas to Europe. “American energy exports to Europe are not directly threatened by tariffs, but tit-for-tat policies could shift the supply to Europe,” said Florence Schmit, an analyst at Rabobank.
