European gas price touches €100 per MWh for first time since December 2022

what happened

Europe's benchmark natural gas contract briefly reached €100 per megawatt hour on Wednesday, the first time it has traded at that level since December 2022, Reuters reported, citing Intercontinental Exchange data. The Dutch front-month contract at the TTF hub was trading at that price around 13:35 GMT, roughly 4% above the previous session.

The move reflects disrupted seaborne shipments of liquefied natural gas from the Middle East, which are keeping supply tight before winter. According to the agency, prices have climbed back to 2022 highs as the regional conflict has escalated and now sit at roughly three times their level before the war with Iran. Analysts expect high prices to persist for at least another year, even if the conflict ends and winter is mild, because Europe must rebuild storage that has fallen to record lows.

Expensive gas is already feeding into household and business bills, and industries that use gas as a feedstock, including fertiliser, chemicals and steel makers, have partly cut output.

why it matters

For markets, this signals that Europe's gas shortage could last longer than expected. Gas-fired plants usually set electricity prices during peak demand, so higher gas costs also support power prices. The next moves will depend on the Middle East conflict, LNG flows and winter weather.

market impact

Gas TTF: disrupted LNG supply tightens the market, pressure up on European gas prices

• ▲TTF gas pressure up — disrupted Middle East LNG shipments reduce supply available to Europe

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