European gas prices rose on the first trading day of the new year as Europe prepares for frigid winter temperatures without a key source of supply.

January benchmark prices rose as much as 4.3% to 51 euros per megawatt-hour, the highest price since October 2023.

Deliveries of Russian gas across Ukraine were halted on New Year’s Day after the transit contract between the two countries expired with no alternative.

Traders are watching to see if the loss of Russian flows – a major source of supply for several central European states – will trigger faster pumping from storage facilities.

Stockpiles across Europe are already falling at the fastest pace since 2021, when the gas crisis erupted.

The outage coincides with forecasts of sub-zero temperatures in some countries, which will increase demand for heating.

In Slovakia, one of the countries hardest hit by the outage, the mercury could drop to minus 7 degrees Celsius by mid-January.

While Europe is unlikely to run out of gas this winter, thanks to stocks and deliveries from other suppliers, traders may find it difficult to fill storage for the next heating season.