Concern is growing across Europe over unusually low gas reserves, with gas and electricity prices rising to their highest levels in around three and a half years.
On the leading Dutch natural gas futures market, gas prices rose by as much as 5% on Monday before easing slightly. One megawatt hour of natural gas now costs €68.5, up 4%.
According to Matthias Detremmerie of energy supplier Elindus, this is the highest price in three and a half years for next-month natural gas delivery. Prices for gas delivery in 2027 have also climbed to their highest level in three years.
Belgian electricity prices for delivery in September have followed the same trend, reaching their highest level in three and a half years, Detremmerie said.
European gas storage sites are currently only 62% full, marking the first time since 2009 that reserves have been this low at this time of the year.
The war in the Middle East is disrupting gas supplies and pushing prices higher.
Rabobank analyst Florence Schmitt said the outlook is worsening by the day. According to Schmitt, the market is realising that gas reserves will play only a limited flexiblity role this winter, as fears grow of further escalation in the Gulf at a time when gas supplies from Norway remain constrained by maintenance work.
There is particular concern about Germany, Europe’s biggest energy consumer, where gas storage is only around half full.
In Belgium, reserves are not yet half full. However, the country’s storage capacity is relatively small, and Belgium is less reliant on winter storage because it has direct gas pipelines to the United Kingdom and Norway, as well as an LNG terminal in Zeebrugge.
