European Gas Prices Hit €97 as Winter Reserves Drop to 10-Year Low

Wholesale gas prices across Europe reached €97 per megawatt-hour on Monday, a level not seen since 2022. The spike follows a drop in temperatures that increased heating demand and raised concerns about supply levels heading into winter.

In the United Kingdom, the month-ahead gas contract climbed 4% to 240p per therm. This marks the highest price point since December 2022, a period defined by price surges after Russia’s invasion of Ukraine.

Market movements also reflect anxiety over the Middle East. Reports indicate the United States and Israel have prepared plans for renewed strikes on Iran following US midterm elections. These developments drove oil prices to $117 a barrel on Friday. Brent crude eased by 2% on Monday but remains above $114 a barrel.

Europe enters winter with gas storage at its lowest level in over a decade. Current storage stands at roughly 75% capacity, well below the seasonal average of 80%. Contributing factors include a slowdown in exports from Qatar and higher summer consumption for refrigeration and cooling.

British energy regulators state the country faces some of Europe’s highest winter energy costs due to its reliance on imports. The UK holds some of the smallest gas reserves on the continent after decades of dependence on North Sea production. The Office for National Statistics reports the UK spent a record £4 billion on power imports in the year ending August. Half of that expenditure covered electricity imported from France. The country also made near-record payments to activate gas plants while paying wind and solar farms to disconnect from the grid due to bottlenecks.

Households in Britain expect a 16% increase in energy costs in January. The typical annual dual fuel bill will rise to the equivalent of approximately £2,000.

Stock markets reacted mildly to the news on Monday. The Stoxx Europe 600 index, which tracks major European companies, gained 0.3% in early trading. The UK’s FTSE 100 rose by 0.4% as softer oil prices provided some relief to investors.