European Gas Prices Hit Three-Year High Amid Fill Rate Concerns

European natural gas prices have hit a three-year high of €80/MWh in September, according to data from ICE. The price of TTF gas futures for October rose to €82/MWh on 10 September and further increased to €82.52/MWh just four days later.

The low fill rate of European gas storage facilities is exacerbating the situation. By 15 September, they were only at 68.49%, significantly lower than the 80.6% recorded last year on the same date and below the average seasonal figure for the past five years of 84%. Experts warn that it will be challenging to reach a fill rate of 75% by the start of the heating season.

The prolonged supply constraints through the Strait of Hormuz, high demand for LNG in Asia due to a heatwave, and autumn maintenance work on Norway's gas infrastructure are contributing to the current situation. The narrow spread between summer and winter contracts is also dampening traders' enthusiasm.