European gas benchmark crosses €100 as winter supply concerns grow
The Dutch TTF contract reached €100 per megawatt-hour for the first time since 2022. Businesses face quicker cost pressure than households on retail contracts.
European gas prices crossed €100 per megawatt-hour on 28 October for the first time since 2022, according to AFP, as Middle East war concerns and the need to fill reserves ahead of winter put pressure on the market. The milestone matters to businesses that buy gas near wholesale prices and to households whose contracts may reflect higher costs later.
The Dutch TTF futures benchmark, a reference price for European gas, rose more than 4% to €100.45 per megawatt-hour at about 14:55 GMT, AFP reported. The figure was a price observed during trading, rather than a closing price. Reuters separately reported that the front-month contract briefly touched €100 at about 13:35 Irish time, citing Intercontinental Exchange data.
Why European gas prices are rising
AFP said the rise reflected concern about further escalation in the Middle East and the need to replenish European reserves before winter. Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said concern about renewed escalation was driving prices higher. He also pointed to forecasts for lower wind and solar generation in Europe, which could increase demand for gas-fired power.
Europe entered the heating season with gas storage nearly 75% full and Germany’s around 60%, both below the previous year’s levels, Reuters reported. ‘As winter approaches, Europe has less of a storage cushion than needed and fewer options to quickly replace disrupted supply,’ said Mathieu Utting, a gas and LNG analyst at Rystad Energy, in the Reuters report. Those stock levels help explain why traders are sensitive to supply risks as heating demand rises.
What €100 gas means for industry and bills
The price is still well below the €345 per megawatt-hour peak AFP reported for March 2022, during the energy crisis after Russia invaded Ukraine. The comparison shows the scale of the current rise without equating it with that earlier peak. AFP said European countries are using less gas than in 2022 as renewables supply more electricity, a change analysts expect to limit the effect on power bills compared with that crisis.
For companies in chemicals, fertilisers and steel, gas can be both a fuel and a raw material. Reuters reported that some firms have reduced output and that businesses buying at or near wholesale prices feel cost increases quickly. Household retail contracts respond more slowly; Reuters said most of the impact on consumer bills is expected in 2027. In Britain, bills are set to rise again in January, while German gas tariffs for new customers have already risen 55% this year, the report said.
European Union governments have spent €17.9 billion this year cushioning households and firms from higher oil and gas costs, according to a European Commission note cited by Reuters. The spending illustrates the wider budget pressure that energy costs can create alongside the direct effect on gas users.
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Sources and context
- European gas prices hit 100 euros for first time since 2022The Straits Times (AFP report)
- European gas hits €100/MWh for first time since 2022RTÉ (Reuters report)
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.