Energy Prices Soar Ahead of Winter as LNG Flows Through Hormuz Threaten European Supply
Global energy prices are surging ahead of winter as Japan's day-ahead power prices rose 20% in one week to $0.16/kWh, the highest since January 2023.
Spot LNG for October delivery into northeast Asia reached $22.50/MMBtu, while some Asian buyers have increased coal use due to higher gas prices.
Dutch front-month gas futures reached €67/MWh on Monday, the highest level since early 2023, and Goldman Sachs analyst Samantha Dart stated that if LNG flows through the Strait of Hormuz recover only gradually through 2027, December 2026 TTF prices could exceed €100/MWh.
European storage stood at 61.68% versus a seasonal norm of 72.5%, but some analysts have noted mitigating factors such as increased U.S. LNG exports this year and the potential for a warmer winter to ease demand.