European Gas Prices Soar to New High on Geopolitical Concerns

The European natural gas prices have surged over the summer, reaching an all-time high of EUR 68 MWh for the TTF month-ahead contract. This is a significant increase from the beginning of the year when prices hovered around EUR 30/MWh. The recent acceleration in prices began in June and continued into July and August, driven by geopolitical and supply concerns as well as relatively low European gas inventories.

The current surge is still below the price shock experienced in August 2022 when TTF prices briefly exceeded EUR 300/MWh. Nevertheless, the recent development represents an important upside risk to European energy costs and inflation.