Lower supply expectations are driving European natural gas prices to their highest levels since December, with May set to record the largest monthly increase since last August.

Benchmark futures jumped 20% in May, the largest monthly increase since last August.

From a low of 23 EUR/MWh in late February, prices have surged nearly 55% to 35 EUR/MWh. 

"Contracts have gained for three consecutive months as supplies have tightened, just as traders are beefing up stocks ahead of next winter," Bloomberg said, adding that increased liquefied natural gas demand from India to Argentina means the bloc must fiercely compete in international markets after Russian NatGas flows to the EU have collapsed in recent years. 

Here's Goldman's Samantha Dart's take on supply woes pushing EU NatGas prices higher:

More from Dart:

Heading into summer, there is some good weather news: Europe is set for a cooler start. But should a heat dome trap the continent in an inferno - this is where prices could start rocketing higher. The EU is now at the mercy of international markets.