European natural gas prices rose 8.2% on a weekly basis to their highest level since December 2022 on Friday, amid continued shipping disruptions in the Strait of Hormuz and concerns over the supply outlook ahead of the heating season.
The Dutch TTF benchmark for November futures contracts closed at €81.43 per megawatt-hour on Oct. 9.
Prices climbed by 8.2% from Friday’s close to €88.1 per megawatt-hour at 3.13 p.m. local time (12.13 GMT) on Friday. This marked the highest level for European natural gas prices since December 2022.
Natural gas prices had risen to €86 per megawatt-hour on Monday as increased tanker attacks in the Strait of Hormuz and escalating regional tensions heightened concerns over the security of liquefied natural gas (LNG) supplies.
Prices climbed as high as €87.22 per megawatt-hour on Tuesday and remained above €86 throughout the rest of the week.
– European gas storage below five-year average
According to Gas Infrastructure Europe data, gas storage facilities across European Union countries were 74.1% full, compared with 83.04% at the same time last year.
According to international media outlets, Warren Patterson, head of commodities strategy at ING, said Europe was entering the heating season with low storage levels, while LNG flows from the Persian Gulf remained around 80% below the level recorded a year earlier.
Patterson said that while oil shipments had partially recovered, LNG flows had not seen a similar improvement. He added that LNG supplies from the Persian Gulf could remain limited for a significant part of the Northern Hemisphere winter.
Pointing to below-average European gas storage levels as another factor supporting prices, Patterson said the German government had asked state-controlled SEFE to purchase and store an additional 8 terawatt-hours of natural gas by Dec. 15.
– LNG competition between Asia and Europe set to intensify
Shipping disruptions in the Strait of Hormuz are making it more difficult for Europe to replenish its gas inventories, while declining LNG supplies from the Middle East are tightening the global market.
Patterson said Asia and Europe were likely to continue competing for available LNG cargoes throughout the winter, adding that low storage levels could leave the European market vulnerable to price spikes in the event of further supply disruptions or colder weather.
ING expects the TTF benchmark to average €73 per megawatt-hour during the 2026-2027 winter season, raising its previous forecast of €65.
According to ING’s assessment, prices could decline significantly from the second quarter of 2027 as supplies from the Persian Gulf normalize and US LNG export capacity expands.