(Bloomberg) — Natural gas in Europe advanced as planned strikes in Norway threaten to further tighten a market that’s already reeling from Russia’s supply cuts.

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Benchmark futures rose as much as 4.9% after three consecutive weekly gains. About 13% of Norway’s daily gas exports are at risk amid plans to escalate an impending strike by managers, the nation’s oil and gas lobby warned over the weekend. Three fields are set to be shut by the strike starting Tuesday, while planned action the following day would take out another three projects.

Norwegian supply is becoming increasingly important for the continent after shipments from biggest provider Russia slumped amid the invasion of Ukraine and subsequent sanctions on Moscow. The impact is spreading through the European economy, hurting industries that cannot pass on increased costs of the fuel to end-users.

With prices at these levels, “there is no doubt we have entered demand destruction territory, which eventually may help stabilize the market,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “In the short term, and with battered and bruised traders increasingly turning off their screens to go on holiday, we may see lower activity with the news flows dictating the level of volatility.”

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Dutch front-month gas futures, the European benchmark, were at 155 euros per megawatt-hour at 10:33 a.m. in Amsterdam, the highest intraday level since March 10. The UK equivalent surged as much as 10%.

Demand Destruction

Major industries in Europe’s powerhouse, Germany, could face collapse because of gas-supply cuts, the country’s top union official warned before crisis talks with Chancellor Olaf Scholz starting Monday. The energy crunch is already driving inflation to record highs, and could lead to social and labor unrest, Yasmin Fahimi, the head of the German Federation of Trade Unions, said in an interview with the newspaper Bild am Sonntag.

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Russia has reduced shipments through its biggest Nord Stream pipeline by 60% and the link is scheduled for a full shutdown next week for maintenance. Germany has raised doubts that the link will resume supply following the works.

Germany’s industrial sector, with a 35-40% share of gas demand, appears particularly vulnerable to the potential risk of Russia halting flows as stockpiles for winter household and district heating are set to be prioritized, analysts at Bloomberg Intelligence said in a note.

While power stations have some flexibility to switch to other fuels, a full cut in Russian supply to Germany in August would see a demand destruction of 20-25 billion cubic meters, or 27% compared to 2021, they said.

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