Natural gas prices in Europe have reached 101.82 euros (equivalent to 114 dollars) per megawatt-hour, marking the highest level since the gas crisis in 2022. This price increase comes as gas storage in the European Union has decreased to 74.89 percent, raising concerns about gas supply during the winter season.
Gas price increase amid Middle East tensions
Gas prices at the Dutch gas trading hub (TTF) have increased by 4 percent, and it is expected that this price will rise by 8 percent during the current week. This price increase is due to concerns over escalating tensions in the Middle East and their impact on LNG flows from Qatar and the UAE through the Strait of Hormuz. Many analysts believe that these tensions could lead to further reductions in gas supply in Europe.
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Gas storage and seasonal concerns
As of October 29, gas storage in the European Union was only 74.89 percent full, which is significantly lower than the five-year average of 86 percent for this time of year. With the onset of winter, it appears that gas storage will struggle to increase, and with the start of withdrawals in several countries, concerns about gas supply during the winter have intensified. Additionally, QatarEnergy announced this week that it will continue its force majeure status for LNG deliveries until the end of the year, which will impact gas supply for Europe and Asia during the winter season.
According to Valery Peterson, head of commodity strategy at ING, "The market is on the rise, and there are no signs of an imminent improvement in LNG flows from the Gulf. If anything, the outlook seems to include the risk of increased U.S. attacks on Iran after the midterm elections in the U.S."
Peterson also noted that "LNG supply disruptions penetrate deeper into the winter season" and added that several unexpected outages in Norway have also added to Europe's concerns about gas supply.
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