(Bloomberg) -- The current volatility taking hold of gas prices, especially in Europe, is a “signal that the market is much tighter than many expect,” according to the head of Australia’s biggest natural gas exporter.

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“If you went back just two months ago, people would say ‘it feels like the market is in really good shape, Europe and Asia have good inventories,’ ” Meg O’Neill, chief executive officer of Woodside Energy Group Ltd., said in an interview on the sidelines at the Energy Intelligence Forum in London Tuesday. “Roll forward not that many weeks and we’ve got signs of pressure.” 

Intense price swings have dominated Europe’s gas market, with futures contracts rising almost 20% since the start of the heating season in October. Gas futures traded near the year’s highs even after easing on Tuesday. Concerns over the future of Russian flows are also contributing to market anxiety. 

At the same time, gas stockpiles at the region’s storage facilities, which have provided a lifeline during the coldest periods, dropped rapidly after frosty temperatures increased demand for heating and a slump in wind generation required more supply for power.

“Some nations will have stocked up and will have long-term contract positions that will ensure they have the gas they need and there will be others that will be struggling,” O’Neill said.

Colder weather and increased heating demand could put more pressure on supplies, both from traditional pipeline providers and the global liquefied natural gas market. But in the long term, a new wave of LNG coming to the market should ease tightness.

“The wild card always in the gas world is the weather and if we encounter an unusually cold or an unusually long cold spell, that’s when things can get a little bit trickier,” O’Neill said. “I do expect that things will be tight probably for another year or so and then we’ll get a bit more supply.”

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