Europe’s benchmark natural gas prices rose on Thursday to nearly 90 euros per megawatt-hour, or the equivalent of $29.50 per million British thermal units (MMBtu), as the escalation in the Middle East raised concerns about European winter gas supply amid historically low inventories at the start of the heating season.
The front-month price at the Dutch Title Transfer Facility (TTF), the benchmark for Europe’s gas trading, had jumped by 2.7% at 9 a.m. Amsterdam time on Thursday, tracking a 3% surge in oil prices as the Saudi-Houthi conflict escalates and Iran said it had struck several oil tankers doing transfers in the Persian Gulf.
At $100.84 (89.76 euros) per megawatt-hour (MWh), the European gas price is now at its highest levels since December 2022, when Europe faced the first winter without most of the Russian pipeline gas supply. The current price is also equivalent to about $29.50 per MMBtu.
EU storage sites were only 74% full as of October 21, per data from Gas Infrastructure Europe. That’s well below the five-year average of about 86% for this time of the year so close to the start of the heating season.
Prices are vulnerable to further spikes in case of colder winters in either Europe or Asia, or both, or if another supply disruption hits the market.
Early on Thursday, Brent Crude prices hit a five-month high of $112 per barrel, due to fears of further disruptions to supply from the Middle East.
“European natural gas faces similar risks, with relatively low storage levels leaving the region more dependent on continued imports throughout winter,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, wrote in a Thursday note.
“A prolonged cold spell, combined with renewed disruptions to LNG shipments, could trigger another sharp increase in prices from the current level around EUR 90 per MWh ≈ USD 29.50 per MMBtu.”
As Europe enters the winter with lower-than-usual buffers, and Asia has mostly used its demand-side flexibility, there is a risk of late-winter price spikes, consultancy Timera Energy said last week in its winter gas outlook.
“Our winter 2026/27 outlook assumes Hormuz remains closed through Q4 2026, with gradual reopening through Q1 2027. Under this scenario, late-winter price upside becomes particularly acute if European stocks run low,” the analysts said.
By Michael Kern for Oilprice.com
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