Gas prices in Europe have reached record levels due to strong demand and falling gas stocks.
In Europe, the price of gas crossed the $500 mark per 1,000 cubic meters for the first time since November 2023.
The price of a December futures contract on the TTF hub in the Netherlands reached around $500.5 per 1,000 cubic meters, or the equivalent of 45.9 euros per MWh, based on the current exchange rate euro/dollar.
This price increase is mainly due to a sharp increase in gas withdrawals from European underground storage, with volumes extracted almost 50 times higher than the volumes injected.
Currently, underground storages in European countries are 92.58% full, 0.54% more than the average of the last five years for the same period, representing 102.76 billion cubic meters of gas.
Decrease in European gas stocks compared to 2023
Furthermore, LNG (liquefied natural gas) prices follow the evolution of gas prices, which reached 44.26 EUR/MWh, their highest level since 2023.
This rise in LNG prices in Europe is mainly due to colder temperatures and tighter LNG supply, according to Australian bank ANZ.
She also highlighted that gas storage levels in Europe are 93% full, sparking concerns among some market participants that reserves are being consumed too quickly.
In comparison, European storages were 99.5% full at the same time last year, according to Gas Infrastructure Europe.
As a reminder, at the end of October, European gas prices had already reached their highest level of the year, approaching 44 euros per megawatt hour. This increase was amplified by a production interruption in Norway, the main supplier to the continent, as well as by the uncertainty linked to the situation in the Middle East, which had increased concerns on the market.
Jihen Mkehli
Published on 11/19/24 08:01
