(Bloomberg) -- European natural gas prices gained for a second day as fears that Russia’s escalating war in Ukraine could hit supplies countered steadily building stockpiles in the continent.

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Benchmark futures have risen 3.9% over the last two sessions, after bottoming out at the lowest level in over three months earlier in the week.

Russian gas transit through Ukraine remains stable for now, including preliminary shipment orders for Thursday. But markets are nervous about risks to pipelines that are the last remaining route carrying the Russian fuel to western Europe after President Vladimir Putin threatened more missile attacks.

Read also: Putin Says All Infrastructure at Risk After Nord Stream Hit

Electricity rationing and blackouts could become inevitable across Europe if Russian flows are crimped further, consultant Inspired Energy Plc said in a note.

Russia’s Gazprom PJSC also warned that European households could still freeze if there are severe cold snaps this winter, despite the continent having almost filled its gas storage facilities.

“Sure, Europe will survive,” Chief Executive Officer Alexey Miller said Wednesday. But it would be tough, and next winter could be even worse. “It will be clear then that the energy crisis has come not for a short period of time.”

Dutch front-month gas, Europe’s benchmark, closed 2.2% higher at 160.19 euros per megawatt-hour. The UK equivalent gained 2.7%.

Bullish Sentiment

“Buying interest appears to be increasing following the recent price falls, and the recent escalation to the war in Ukraine also adds to the bullish sentiment,” analysts at trading firm Energi Danmark said in a note.



Gas prices are about five times higher than usual for the time of the year. They have, however, eased from the highs of late August as fuller than normal stockpiles at about 91% provide a buffer and liquefied natural gas imports continue at high levels. The weather also remains mild in most of Europe, delaying a boost in heating demand.

European leaders are stepping up policy efforts to prevent the energy crisis from further engulfing their economies as surging prices contribute to the highest inflation in decades, squeezing household finances.

Also see: EU Edges Toward Temporary Fix to Gas Setting Power Prices

The European Commission will weigh whether to put forward legislation next week that would temporarily cap the price of gas used for electricity generation, according to Energy Commissioner Kadri Simson. Tougher binding gas demand reductions may also be needed, she said.

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