Wholesale gas hits €97 as European winter storage drops to 75 percent

European wholesale gas prices reached €97 per megawatt-hour on Monday, marking the highest level since 2022. The spike reflects tightening supply conditions as the continent prepares for winter heating demand. Traders priced in a stronger need for gas as temperatures fell across the region.

The price trajectory follows a series of supply disruptions and shifting trade flows. Reports that the United States and Israel are planning renewed strikes on Iran after US midterm elections added pressure to the market. Those reports drove oil prices to $117 a barrel on Friday. Although Brent crude retreated by 2 percent on Monday, the benchmark remains above $114 a barrel.

European storage levels are at a decade low, sitting at approximately 75 percent capacity. This figure falls short of the seasonal average, which typically hovers near 80 percent. The shortfall stems from a slowdown in exports from Qatar and increased consumption during the summer months to power refrigeration and cooling systems.

The United Kingdom is facing some of the highest energy costs in Europe this winter. Regulators cited a heavy reliance on imports to maintain steady supply. The UK maintains some of the smallest gas stores on the continent following decades of dependence on North Sea production. According to Office for National Statistics figures, the UK paid a record £4 billion on power imports over the year ending in August. Half of that sum covered electricity imported from France.

Grid bottlenecks have forced the UK to make near-record payments to operate gas plants while wind and solar farms are paid to reduce output. British households face rising costs, with the typical annual dual fuel bill predicted to increase by 16 percent in January. That adjustment would bring the average bill to approximately £2,000.

Stock markets responded with modest gains on Monday, driven by the slight dip in oil prices. The Stoxx Europe 600 index, which tracks major continental companies, rose 0.3 percent in early trading. The UK’s FTSE 100 index climbed 0.4 percent. The UK’s month-ahead gas contract rose 4 percent to 240p per therm, its highest level since December 2022.