European Gas Prices Top €80 for First Time in Three Years

European natural gas futures have broken above €80 per megawatt-hour for the first time since 2023, as thin storage reserves and converging supply pressures push prices higher ahead of the heating season. October contracts on the ICE exchange reached €82.52/MWh on September 14, extending a rally that gathered pace through August and September.

Storage levels sit at the heart of the concern. Reserves across Europe stood at just 68.49% of capacity as of September 15 — well short of the 80.6% recorded a year ago and the five-year seasonal average of 84%. At the current pace of injections, reaching the industry’s 75% pre-winter benchmark will be difficult.

Several forces are tightening supply at once: prolonged flow restrictions through the Strait of Hormuz, scheduled maintenance on Norwegian gas infrastructure, and persistently high Asian demand for liquefied natural gas are all weighing on available volumes.

GMK Center notes that European countries enter this heating season better prepared than they were during the 2022 energy crisis, owing in part to a diversification of energy supply sources pursued since then.

Morgan Stanley analysts forecast an average TTF price of €85/MWh over the winter. Should temperatures fall sharply and Qatari LNG deliveries face further disruption, the bank warns prices could breach €100/MWh.

Source: GMK Center