European Gas Prices Surge on Supply Fears

European natural gas prices climbed above €95/MWh on Monday, hitting a fresh 2022 high as escalating military conflict in the Middle East heightened concerns over gas supplies ahead of winter. LNG shipments from the Persian Gulf, which accounted for around a fifth of global supply before the conflict, remained largely disrupted, with flows approximately 80% below year-earlier levels. Meanwhile, European gas storage stood at just 74.62% of capacity as of October 25, below historical averages for this time of year. Concerns are mounting as some EU countries have begun drawing on stored gas amid falling temperatures. With storage levels relatively low, Europe has a smaller buffer against further supply disruptions and a potential surge in heating demand, leaving the market vulnerable to price hikes in the coming months.