European Gas Prices Extend Advance

European natural gas prices rose further above €88 per megawatt-hour on Monday, the highest since December 2022, as limited Gulf LNG supplies continue to hamper the EU’s efforts to replenish depleted gas storage ahead of winter. Europe’s gas storage levels have risen steadily in recent weeks, reaching 74.31% of capacity as of October 18, but remain below typical levels for this time of year. Ongoing tensions and security threats in the Middle East have fueled concerns about shipping safety and tighter global energy supplies. LNG flows from the region remain about 80% lower than last year’s levels. This sets the stage for intensified competition between Asia and Europe, the world’s two largest LNG-importing regions, for available cargoes as winter approaches. Prices remain vulnerable to further spikes in the event of a colder winter and sustained supply disruptions.

European natural gas prices rose to €88 per megawatt-hour, the highest since December 2022, as tight global LNG supply and low storage levels heightened concerns over winter supplies. EU gas storage facilities were around 74.1% full, far lower than typical levels for this time of year, with some countries struggling to meet the minimum storage requirements. Replenishing inventories has become challenging for Europe due to shipping disruptions through the Strait of Hormuz, with Middle Eastern supplies remaining about 80% lower than a year earlier. This sets the stage for fiercer competition between Asia and Europe, the world’s two largest LNG-importing regions, for available cargoes as temperatures fall. Prices remain vulnerable to further spikes in the event of a colder winter and prolonged supply disruptions. For the week, European gas prices have risen more than 7%, marking their third consecutive weekly gain.

European natural gas prices fell below €86 per megawatt-hour on Thursday, taking a pause after a rally to multi-year highs amid Persian Gulf supply risks and low winter storage reserves. Shipping disruptions through the Strait of Hormuz have constrained LNG flows from the Middle East, which accounts for around 20% of global LNG exports. The loss of Gulf supplies has intensified competition for spot cargoes, tightening availability for Europe and complicating efforts to replenish inventories. European gas storage facilities are currently around 74% full, below historical averages for this time of year. Storage replenishment could face further challenges from early-season cold weather, with updated forecasts pointing to a significant cold snap across northeastern Europe from next weekend that could boost heating demand. Meanwhile, the recovery in Norwegian pipeline supply provided some relief.