Wholesale gas price in Europe exceeds €1 per cubic meter for the first time since 2022

The wholesale price of natural gas in Europe exceeded €97 per megawatt-hour (about €1 per cubic meter) for the first time since 2022 on October 26. The market is reacting to the risks of supply disruptions and the approach of winter, which could increase demand for heating.

This is reported by Bloomberg.

On Monday, gas contracts for delivery next month rose by 3.5%. As of 08:50 Amsterdam time (09:50 Kyiv time), they were trading 3.2% higher at €96.88 per megawatt-hour (about €0.97 per cubic meter of gas). This is the wholesale price for companies, not the tariff for household consumers.

Gas traders expect heating demand to rise in the coming days as temperatures cool in Europe. At the same time, global gas supplies are tight and supply disruptions amid the Middle East war are intensifying competition for liquefied natural gas between Europe and Asia.

Europe is entering peak gas demand season with low inventories. EU storage is around 75% full, the lowest level for this time of year since records began in 2009. In Germany, inventories are just over 61%.

Prices are also being affected by uncertainty about the situation in the Middle East. According to Bloomberg, Iran is preparing for a possible new campaign of American strikes ahead of the US midterm elections in November and plans to respond in the region.

Despite the increase, gas prices remain well below the peak levels of the energy crisis of previous years. However, the price increase could increase inflation and negatively affect economic activity.

Amid rising gas prices, the wholesale price of electricity in France for delivery in November exceeded €200 per megawatt-hour (€0.20 per kilowatt-hour) for the first time since January 2023.

• In Ukraine, gas prices will remain unchanged throughout the autumn-winter period. This is due to the fact that the government has extended special obligations in the natural gas market until March 31, 2027.

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