El Nino Brings Uncertain Relief to European Gas Markets

A strong El Nino has pushed European winter gas prices to year lows, but analysts say only exceptional warmth would offset storage levels below last year's.

European winter gas prices have sunk to their lowest of the year on forecasts of a historically strong El Nino. However, analysts caution that only exceptional warmth would be enough to offset storage levels well below last year's after a summer of war-driven supply disruption.

The FT's Lex column frames Europe's position bluntly: 'Europe's strategy for winter is largely to hope it is not very cold,' with storage at 69 percent full against more than 80 percent a year ago, according to think-tank Bruegel. August prices at the European bourse were almost double those of August 2025.

Rystad Energy's analysis finds that European winter temperatures would need to be at least 2C above the historical average before LNG demand falls to or below last winter's level. July forecasts put the probability of an El Nino over the next nine months at 100 percent, with an 81 percent chance the key temperature index rises at least 2.0C and 97 percent for 1.5C.