Natural gas prices in Europe grew to the highest level for this time of year, Bloomberg reports. This resulted in higher electricity costs for factories and utilities.

Among general fall at commodities market, UK benchmark gas price got close to December level, when major pipeline exploded. Traders and analytics expect further increase.

Current situation does not correspond with usual seasonal tendency, when gas prices decline due to lower heating demand.

Energy demand in China attracts shipments of liquified natural gas that otherwise would stay in Europe. It causes market tightness, while China increases consumption due to government's policy to reduce pollution coming from use of coal. These factors together with highest in ten years prices for carbon emissions drive electicity prices up from Britain to Germany and France.

Gas held in European storage tanks fell below 20% full by the end of winter. And although it most likely was elevated, it is still the lowest for this time of a year.

European demand has been growing for three years in a row. All factors mentioned above will leave market tight years ahead, analytics assume.