European natural gas prices could rise to €130 per megawatt-hour early next year if temperatures fall sharply during the winter. Gas prices in Europe exceeded €100 per megawatt-hour on the previous day, driven by tensions in the Middle East that have disrupted liquefied natural gas (LNG) supplies and strong demand from Asia. This marked the highest level since December 2022.
Futures contracts for November delivery at the Dutch TTF hub are currently trading at around €96 per megawatt-hour. Prices have climbed from below €70 per megawatt-hour in early September, partly due to a significant decline in Qatari LNG supplies amid the effective closure of the Strait of Hormuz. Qatar, which accounts for approximately one-fifth of global LNG supply, has seen its export volumes fall to a quarter of pre-war levels.
Analysts warn that gas prices exceeding €100 per megawatt-hour could prompt governments to intervene in an effort to curb demand. The lack of progress toward reopening the Strait of Hormuz is also weighing on expectations for winter gas supplies. Meanwhile, Asian importers seeking to prevent potential supply disruptions are turning to the spot market.
Experts note that China is also making purchases at elevated prices to meet its natural gas reserve targets. Strong demand in Asia is redirecting LNG shipments toward the region rather than Europe. As a result, European countries competing with Asian buyers for LNG supplies may have to offer higher prices.
Analysts have also highlighted forecasts of below-average temperatures in early November. Here we are to serve you with news right now. It does not cost much, but worth your attention.
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