European Gas Reserve Deficit Hits Three-Year High Ahead of Peak Winter Demand

The European gas reserve deficit has escalated, pushing natural gas prices to three-year highs and straining regional supply chains ahead of peak winter heating demand.

Data from Gas Infrastructure Europe revealed that European gas storage facilities were at 69% capacity as of September 18, falling significantly short of the five-year average of 85% for mid-September.

The price of benchmark natural gas traded at €81 ($93) per megawatt hour, a 150% increase year-over-year. Financial institutions warned that a colder-than-expected winter could drive benchmark prices to €100 per megawatt hour, further straining regional supply chains and inflating household utility costs.

Economic planners faced additional pressure as persistent gas price hikes began feeding into core inflation metrics, with natural gas price shocks creating far longer-lasting inflationary spikes than crude oil price movements.