Key facts
- Europe's benchmark natural gas prices rose 6% to 84.275 euros per megawatt-hour.
- The price surge is linked to increased risks to oil and gas supply from the Middle East.
- Saudi Arabia shut down its East-West oil pipeline after drone attacks.
- Asian spot LNG prices surged last week to their highest level since 2022.
- European gas storage levels are below 70%, compared to an 80% five-year average.
Europe's benchmark natural gas prices jumped 6% on Monday to their highest level since the 2022-2023 crisis, reaching 84.275 euros per megawatt-hour, as escalating Middle East tensions increased risks to global energy supply. The surge in prices at the Dutch Title Transfer Facility (TTF) follows Saudi Arabia's shutdown of its key East-West oil pipeline due to drone attacks, which has rattled energy markets.
Asian spot LNG prices have also surged to their highest level since 2022, intensifying competition for available global LNG cargoes. European gas storage sites are currently less than 70% full, significantly below the five-year average of over 80% for this time of year. This low storage level, coupled with ongoing geopolitical risks, has contributed to the upward pressure on gas prices as Europe heads into winter.
Intelligence firm Kpler noted the potential for a global 'fight for fuel,' particularly if the winter is colder than anticipated. Saxo Bank's Ole Hansen highlighted that the disruption has forced European and Asian buyers to compete more aggressively for alternative cargoes, pushing European natural gas prices above the equivalent of $140 per barrel.