The futures price of natural gas for November at the Dutch TTF hub surged to around $1003 per 1000 cubic meters. This price increase has occurred while cash gas prices in major trading centers in Europe are also above $1000 per 1000 cubic meters.
Decreasing Reserves and Ongoing Crises
The rise in prices in the European gas market coincides with unprecedented decreases in reserves of this product ahead of the winter season and ongoing conflicts in the Middle East. According to reports, European households and industries will face high gas prices for at least another year. Even if conflicts are resolved and a mild winter occurs, there will still be a need to refill gas reserves in Europe.
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Disruptions in Gas Exports and Their Impacts
Overall, base gas prices in Europe have increased by more than 150% this year. One of the main reasons for this increase is shipping disruptions in the Strait of Hormuz due to regional tensions. These disruptions have affected nearly 20% of global liquefied natural gas exports. While some countries like the United States, Canada, and Nigeria have increased their gas exports, these disruptions in Middle Eastern gas exports have intensified competition for new shipments of this product and disrupted Europe's efforts to refill its storage during the summer.
Read more: Natural gas prices in Europe have reached their highest level since 2022 · Middle Eastern crude oil exports have returned to pre-war levels
