Natural gas prices in Europe rose to a 4-year peak

Natural gas futures for November delivery at the Netherlands-based TTF, which serves as the benchmark in Europe, approached 101 euros per megawatt-hour, hitting a 4-year peak.

The price of gas per megawatt-hour in November contracts at the Netherlands-based TTF, considered the benchmark for natural gas pricing in Europe, approached 101 euros during the day. The climb in prices, which hovered below 70 euros in early September, was decisively driven by the de facto blockade in the Strait of Hormuz, which reduced shipments from Qatar—provider of one-fifth of global LNG supply—to one-fourth of pre-war levels.

Analysts warned that prices exceeding 100 euros could trigger government interventions aimed at curbing demand. While it was noted that the lack of progress toward opening the Strait of Hormuz undermines winter supply expectations, it was recorded that importers in Asia and China have been purchasing gas from the spot market at high prices. This situation has led LNG cargoes to shift toward Asia and forced Europe to raise prices in order to compete.

Assessment: It is projected that if the winter months prove to be excessively cold, prices could climb to 130 euros per megawatt-hour by the beginning of next year. It is emphasized that expectations of below-normal seasonal temperatures and low wind speeds forecasted for early November carry the risk of accelerating gas withdrawals from storage facilities that are not fully stocked.