European gas prices rise as low storage meets Norwegian outages

what happened

Dutch and British gas prices moved slightly higher on Monday morning. Reuters reported that low storage levels, an outage and maintenance work at a Norwegian processing plant and gas field supported prices, which were already elevated because of the conflict in the Middle East.

By 0823 GMT, the Dutch front-month contract at the TTF hub had gained €1.141 to €82.575 per megawatt-hour, equivalent to about $27.08 per million British thermal units, ICE data showed. The British front-month contract rose 2.87 pence to 205.45 pence per therm. Analysts at Mind Energy said the TTF front-month contract had returned to levels near a four-year high, with Middle Eastern supply still well below average and European storage critically low before winter.

Gas Infrastructure Europe data showed that European storage sites were 73.61% full, well below the usual level for this point in the year. LSEG analyst Yuriy Onyshkiv said new Gassco outages could be extended, potentially reducing exports by around 15 million cubic metres per day later this week. Gassco said unplanned work at the Gullfaks gas field would cut Monday’s supply by 5 million cubic metres, while an outage at the Karsto processing plant had reduced supply by 11 million cubic metres per day. The benchmark European carbon contract fell €0.22 to €86.72 a metric ton.

why it matters

Low inventories and the risk of longer Norwegian disruptions are increasing the European gas market’s exposure to supply shocks ahead of winter. The Middle East conflict is also pressuring global gas markets by restricting transit through the Strait of Hormuz, which typically handles about a fifth of global liquefied natural gas flows.

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