European Gas Hits €97 Per MWh Amid Winter Shortages

European wholesale natural gas prices reached 97 euros per megawatt hour on Monday, a level last observed in 2022. The sharp increase reflects growing concerns about winter supply reliability and the impact of the Middle East conflict on global energy markets.

In the United Kingdom, the month-ahead gas contract rose by 4 percent to 240 pence per therm. This marks the highest price point since December 2022, following the surge caused by Russia’s full-scale invasion of Ukraine. Traders attributed the price movement to falling temperatures across the continent, which increased demand for heating.

Markets also reacted to reports that the United States and Israel have drafted plans for renewed strikes against Iran after the US midterm elections. These reports pushed oil prices to 117 dollars per barrel on Friday. Although the international Brent crude benchmark eased by approximately 2 percent on Monday, it remained above 114 dollars per barrel.

Europe is entering the winter season with gas storage at its lowest level in over a decade. Current storage stands at about 75 percent full, compared to a seasonal average of 80 percent. The decline is attributed to a slowdown in exports from Qatar and higher summer consumption for cooling and refrigeration.

British energy regulators stated that the UK faces some of the highest energy costs in Europe this winter due to its reliance on imports. The country has some of the smallest gas stores in Europe after decades of depending on North Sea production. Data from the Office for National Statistics shows the UK spent a record 4 billion pounds on power imports in the year leading up to August. Half of that expenditure covered electricity imported from France. The country also made near-record payments to start gas plants while paying wind and solar operators to switch off due to grid bottlenecks.

Households in Britain expect higher bills as energy costs are predicted to rise 16 percent in January. This increase would bring the typical annual dual fuel bill to approximately 2,000 pounds. Stock markets showed modest gains on Monday as the softer oil price provided relief. The Stoxx Europe 600 index gained 0.3 percent in early trading, while the UK’s FTSE 100 rose by 0.4 percent.