Europe's Gas Storage at Record Low as Winter Approaches

Europe's natural gas storage facilities are at their lowest level in at least 15 years as winter approaches, leaving the region vulnerable to price spikes and supply rationing. As of early September, EU gas storage was only about 65% full, a sharp contrast to the roughly 80% seasonal norm.

The shortfall stems from a miscalculation by European utilities who delayed purchases on the assumption that the Iran conflict would end quickly, allowing Qatari LNG to resume flowing through the Strait of Hormuz. However, renewed fighting between US forces and Iran has intensified, with direct strikes on Islamic Revolutionary Guard Corps sites and retaliatory missile attacks on American air bases in Jordan.

The Dutch front-month TTF futures surged to €74.32 per megawatt-hour on Wednesday, a 25% jump over the past month, while British NBP wholesale gas contracts rallied to 183.95 pence per therm, touching a peak not seen in three years.