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Europe's Unprecedented Natural Gas Rally Drives Up Power

  • Generators demanding cleaner fuel amid clampdown on pollution
  • China’s demand for energy is drawing supplies away from Europe
TOKYO GAS

Photographer: Robert Gilhooly/Bloomberg

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Europe’s natural gas prices have risen to their strongest level for this time of year, lifting the cost of electricity for factories and utilities.

Shaking off gloom depressing broader commodity markets, the U.K. benchmark for gas is nearing levels last seen in December when a key supply line exploded, and seven traders and analysts expect further gains. The move bucks the normal seasonal pattern of weaker prices in the summer when heating demand dwindles and contrasts with slumps in everything from oil to gold, sugar and zinc.