23.10.202602:38:04UTC+00European Gas Prices Extend Rally

European natural gas prices extended their rally on Friday, climbing to €91/MWh and marking a new multi-year high, as continued disruptions to Persian Gulf supplies kept the global LNG market tight in the run-up to winter. Reports that the US is preparing for a potential new strike on Iran after the midterm elections have heightened the risk of prolonged supply interruptions.

LNG exports from the Middle East remain about 80% below their levels of a year ago, setting the stage for fiercer competition between Europe and Asia—currently the world’s two largest LNG-importing regions—for the limited cargoes available.

As of October 22, European gas storage was at 74.62% of capacity, the lowest seasonal level since records began in 2009. This leaves the region with a thin buffer heading into winter and increases its exposure to further supply shocks and stronger heating demand. European gas prices are up 4% so far this week, putting them on track for a fourth consecutive weekly gain.