European Gas Prices Surpass €81!
One of the main reasons for the price increase is disruptions in liquefied natural gas (LNG) supplies from the Persian Gulf to Europe.
Natural gas prices in Europe continue to rise. The price of October futures on the TTF, located in the Netherlands and considered Europe’s main gas price benchmark, increased by 13.2% to €81.48 per megawatt-hour. This means prices remain close to their highest levels since December 2022.
One of the main reasons for the increase is disruptions in liquefied natural gas (LNG) supplies from the Persian Gulf to Europe. Rising military tensions in the Middle East are also increasing concerns about the safety of LNG shipments. Risks in the Strait of Hormuz, through which around 20% of global LNG flows pass, are particularly affecting the market.
The situation in Europe’s gas storage facilities is also drawing attention. Gas storage facilities in the European Union are 67.6% full, compared with 79.9% during the same period last year. This is increasing concerns about supply ahead of the upcoming winter season.
Asian countries’ willingness to pay higher prices for LNG also creates an additional risk for Europe. The possibility of limited LNG cargoes being redirected to Asia instead of Europe is increasing.
Analysts believe that rising gas demand in winter and stronger competition for LNG could put additional pressure on natural gas prices in Europe.