- Gas prices in Europe rose 15% in October, reaching their highest level in eight months.
- The increase in gas prices in Europe is due to cooler weather and conflict in the Middle East.
- This could have implications for commodity prices.
Europe sees natural gas prices rise
Gas prices in Europe rose 15% in October, reaching their highest level in eight months due to cooler weather, the ongoing conflict in the Middle East and the closure of the Tamar field in the Mediterranean. In addition, concerns over the safety of Qatari liquefied natural gas ships in the Strait of Hormuz are driving price volatility. To make matters worse, economic growth in China is further boosting gas demand. Besides, in the short to medium term, increasing the supply of liquefied natural gas (LNG) to the EU from Egypt appears to be hampered by the current gas balance challenges and reduced imports from Israel.
According to the latest data from Gas Infrastructure Europe, European gas storage facilities were recently 99.62% full, a record high for this time of year.
Impact of weather and global factors
Weather forecasts for the first weeks of November predict milder weather across the continent. These weather conditions are likely to reduce demand for natural gas for heating purposes. Some weather forecasts also suggest the possible return of the El Niño phenomenon, which means a significant warming of the waters of the Pacific
A warmer November could temporarily lower natural gas prices in Europe, but ongoing conflict, increased Chinese demand and the development of the LNG market have the potential to affect long-term commodity price trends. Trade professionals need to keep a close eye on the market situation, which is currently extremely dynamic.
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