EU gas prices hit highest level since 2022

EU gas benchmark rises 3.3% from Friday’s close to top €97

European natural gas prices have risen above €97 ($108.8) per megawatt-hour for the first time since 2022, as the Middle East conflict continues to threaten energy supplies. On Monday morning, prices were up 3.3% from Friday’s close.

European gas futures traded at €97.15 per megawatt-hour as of 08:20 GMT. This is the highest level since December 2022 and 3.3% above Friday’s close.

The price reaching this level reflects growing anxiety in the European market. The rise in gas futures shows investors’ and energy companies’ concern about the approaching winter season.

The main reason for the price increase is the escalating conflict in the Middle East. The conflict has particularly affected supplies of liquefied natural gas (LNG). Shipments from the Persian Gulf, which previously accounted for roughly one-fifth of global LNG supply, have fallen by about 80% year on year.

This decline has significantly heightened concerns about winter energy supplies. In recent years, Europe has become more reliant on LNG after reducing imports of Russian pipeline gas, so a disruption in supply from this source has become a particularly sensitive issue for the region’s energy security.

Another factor adding to the market’s weakness is the level of gas reserves. Gas Infrastructure Europe (GIE) reported that EU gas storage facilities are only 74.6% full, which is well below historical seasonal averages.

With winter approaching, insufficient storage levels raise questions about meeting demand during the heating season. If cold weather increases demand, low reserves could put additional pressure on prices.