European wholesale gas prices soar to highest level since 2022

European wholesale gas prices jumped to their highest levels since 2022 on Monday as colder weather and escalating conflict in the Middle East raised fears over winter fuel supplies, the Guardian reported. European wholesale gas prices reached €97, or about £81, per megawatt-hour on Monday. The United Kingdom month-ahead gas contract also increased by 4% to reach 240 pence per therm, its highest point since December 2022. [1]

According to the Guardian, European heating demand is increasing as temperatures fall across the continent. Energy traders are pricing in potential disruptions to Middle East energy supplies following reports of potential joint military action by the United States and Israel against Iran. [1]

As FTMQ News reported earlier, benchmark European natural gas prices reached €87.20 per megawatt-hour earlier in October, up from approximately €32 before conflict involving Iran began. Around one-fifth of global liquefied natural gas shipments typically pass through the Strait of Hormuz. [3]

As FTMQ News reported earlier, European Union energy storage reserves have dropped to their lowest seasonal levels since 2011. Analysts at the Institute for Energy Economics and Financial Analysis previously warned that the European Union might need to reduce winter gas consumption by 7%, or 14 billion cubic metres, compared to last winter. [4]