European Gas Prices Hit 4-Year High... Urgent Push to Secure Supplies Ahead of Winter

Highest Level Since 2022 Energy Crisis
EU Gas Reserves Also at Lowest Level Since 2011
Heating Demand Could Peak During Winter Cold Snaps
Increasing the Risk of Further Price Volatility

European natural gas prices have surged to their highest level since the 2022 energy crisis. The European Union's (EU) gas reserves have also fallen to their lowest level since 2011. Concerns are growing that prices could surge further during winter, when heating demand peaks.

According to Euronews and other media outlets on the 28th local time, front-month prices on the Dutch TTF futures market, the benchmark for European natural gas prices, rose more than 4% at one point during the session, topping 100 euros per megawatt-hour (MWh). This was the first time European natural gas prices had exceeded 100 euros since December 2022, when Russia's invasion of Ukraine triggered an energy crisis.

An LNG tanker waits to berth at Hammerfest LNG, Western Europe's largest liquefied natural gas (LNG) plant, located in Hammerfest, Norway. Hammerfest, Norway = Reuters-Yonhap News.

Natural gas prices have more than tripled in about eight months. In late February, just before the Iran war broke out, prices were around 32 euros per MWh. Prices appear to have risen because the war led to the closure of the Strait of Hormuz, through which about 20% of the world's liquefied natural gas (LNG) supply passes. Euronews reported that virtually no Qatari LNG, which should have arrived last summer, was delivered.

As the weather grows colder, Europe's gas reserves are significantly below their usual levels. According to the EU Agency for the Cooperation of Energy Regulators (ACER), as of October 21, natural gas reserves in EU member states stood at about 75% of storage capacity. EU member states typically fill storage facilities to 90% of capacity by November 1, ahead of winter.

Forecasts suggest that gas prices could surge during a cold snap this winter. Anders Opedal, CEO of Norway's Equinor, a major natural gas supplier to Europe, said at a press conference on the 28th, "Current gas storage levels are the lowest for this time of year since 2011," adding, "Especially as the weather gets colder, Asia and Europe will compete to secure LNG." He also warned that if a cold snap hits during the latter part of winter, when heating demand peaks, gas reserves could fall further and price volatility could increase significantly.

The EU is considering importing natural gas from Canada. According to Euronews, the EU and Canada are expected to discuss the possibility of long-term exports of Canadian LNG to Europe at a summit in Montreal, Canada, on October 29-30.

The two sides are expected to pursue a feasibility study for LNG exports while discussing further cooperation in various energy-related fields. Euronews said, "A draft of the summit's joint statement includes plans to strengthen cooperation on power grids, energy storage facilities, and protecting energy infrastructure."

This content was produced with the assistance of AI translation services.