EU Gas Prices Soar on Depleted Reserves and ECB Rate Hikes

European natural gas prices surged on Wednesday as concerns over depleted winter storage reserves and ECB rate hikes took center stage.

The benchmark European wholesale price climbed 2.7% to around 82.00 euros per megawatt-hour (MWh), pushing further into uncharted territory.

In the UK, the equivalent gas price rose 2.5% to reach 203.00 pence per therm, hitting multi-year peaks.

The European Union's underground storage caverns are currently only 68% full, trailing the five-year seasonal average by approximately 16 percentage points.

This has left energy buffers thin heading into autumn, forcing utilities to refill reserves at near-record prices due to disruptions in LNG shipments through the Strait of Hormuz.

ECB policymakers have sounded alarm bells over the surge in natural gas prices, which has become the central driver of euro zone inflation. ECB Governing Council member Peter Kazimir warned that natural gas and electricity costs are the top threat to regional price outlooks.