Europe Gas Prices Soar to Three-Year High Amid Winter Storage Worries
European natural gas prices have reached a three-year high as traders scramble to fill storage facilities ahead of winter. This surge in prices comes amid uncertainty over an Iran-Oman deal on shipping through the Strait of Hormuz, which could impact LNG flows from the Persian Gulf.
The region's inventories are lagging behind, with storage levels at just 67% full compared to a seasonal norm of 83%. In Germany, home to Europe's biggest storage facilities, sites are only around half full. If extreme cold spells occur during winter, a fill level of about 77% would not be sufficient.
Rising gas prices are also driving up electricity costs, with German power futures for 2027 climbing as high as €126.62 per megawatt-hour, their highest since October 2023. The Dutch front-month futures, Europe's gas benchmark, rose 2.2% to €74.95 a megawatt-hour.