European Gas Prices Reach €97 as Winter Storage Falls to 10-Year Low

European wholesale gas prices reached 97 euros per megawatt-hour on Monday, a level not recorded since 2022. The increase reflects growing concerns over winter supply stability and the ongoing conflict in the Middle East. Traders adjusted prices upward as temperatures across the continent dropped, increasing the projected demand for heating fuel.

In the United Kingdom, the month-ahead gas contract rose by 4% to 240 pence per therm. This marks the highest level for the contract since December 2022, when prices spiked following Russia’s full-scale invasion of Ukraine. The price movement coincides with reports that the United States and Israel have prepared plans for renewed strikes against Iran after the US midterm elections.

Oil markets also reacted to the geopolitical tension. The international Brent crude benchmark reached 117 dollars a barrel on Friday before retreating by approximately 2% on Monday. Despite the dip, the price remains above 114 dollars a barrel. European stock markets showed modest gains on Monday, with the Stoxx Europe 600 index rising by 0.3% and the UK’s FTSE 100 gaining 0.4% in early trading.

European gas storage levels are at their lowest point in over a decade. Current stores stand at approximately 75% capacity, well below the seasonal average of 80%. The shortfall stems from a slowdown in exports from Qatar and higher consumption during the summer for refrigeration and cooling systems. Energy regulators in Britain stated that the country is expected to pay some of the highest energy costs in Europe this winter due to its reliance on imported gas.

The UK has some of the smallest gas reserves in Europe after decades of dependence on North Sea production. According to the Office for National Statistics, the country paid a record 4 billion pounds on power imports over the year ending in August. Half of that expenditure covered electricity imported from France. The nation also made near-record payments to fire up gas plants while wind and solar farms were paid to turn off due to grid bottlenecks.

Household costs are expected to rise in tandem with wholesale prices. British energy bills are predicted to increase by 16% in January. The typical annual dual fuel bill is expected to reach the equivalent of approximately 2,000 pounds for the average household.