European Gas Steadies as Traders Assess Supply Outlook

European natural gas prices steadied at €78/MWh on Thursday, not far from a more than three-and-a-half-year high, as traders assessed the region’s gas supply outlook. Europe is heading into winter with gas storage levels among the lowest seen in two decades, with underground sites only about 68% full, as sustained disruptions to LNG supplies from the Persian Gulf and record summer heatwaves have severely constrained efforts to replenish reserves. This has raised concerns about whether gas supplies will be sufficient during the heating season. Strong demand from Asia and other buyers could also drive more intense competition for LNG cargoes when colder weather sets in. Meanwhile, investors are watching for clearer signals on Germany’s gas purchasing plans, with any increase in buying potentially providing further support to prices amid tight global supplies.

European natural gas prices traded near €80/MWh on Wednesday after rising as much as 4% earlier in the session, with prices remaining close to 2022 highs as supply concerns persist ahead of the winter heating season. Military tensions have kept the Strait of Hormuz largely inaccessible to commercial shipping, keeping Qatari LNG export flows severely restricted and limiting supplies to Europe. European gas storage facilities are around 68% full, still below the seasonal average at a time when inventories would typically be nearing maximum capacity. Concerns over supply security have been reinforced by JERA Global CEO Yukio Kani, who warned that Europe’s low inventories leave the region vulnerable to prolonged disruptions and stronger competition for LNG cargoes. At the same time, scheduled maintenance at Norwegian gas facilities is temporarily reducing pipeline supplies to Europe, further tightening near-term supply.

European natural gas prices dropped below €82/MWh on Tuesday but stayed close to their highest level since late 2022, amid intensifying disruptions around the Strait of Hormuz and concerns over still-below-normal gas inventories. The strait remains closed to most commercial traffic amid ongoing military conflict and security threats, while diplomatic efforts to secure its reopening have stalled, raising fears that disruptions to shipments could persist. LNG tanker traffic through the Strait has fallen sharply, tightening global supplies and intensifying competition with Asia and other buyers for available cargoes. Meanwhile, ongoing maintenance at Norwegian gas facilities is also adding another layer of uncertainty to Europe’s winter supply balance. Europe’s gas storage levels stand at around 68% of capacity, still below the seasonal average at a time when inventories would typically be close to maximum capacity.