European Gas Hits €97 as Winter Reserves Fall to 10-Year Low

European wholesale gas prices climbed to €97 per megawatt-hour on Monday, marking the highest level since 2022. The surge reflects growing anxiety over winter supply stability and the ongoing conflict in the Middle East. Traders adjusted their valuations as temperatures dropped across the continent, anticipating a sharp increase in heating demand.

The price spike is partly driven by reports that the United States and Israel have prepared plans for renewed strikes on Iran following the US midterm elections. These reports initially pushed oil prices to $117 a barrel on Friday. While the international Brent crude benchmark fell by about 2% on Monday, it remains above $114 a barrel.

Storage levels in Europe have also reached their lowest point in over a decade. Current reserves are approximately 75% full, well below the seasonal average of 80%. This shortfall stems from a reduction in exports from Qatar and higher consumption during the summer months to power refrigeration and cooling systems.

The United Kingdom faces similar pressures. Its month-ahead gas contract rose by 4% to 240p per therm, the highest level since December 2022. UK energy regulators noted that the country is expected to incur some of the highest energy costs in Europe this winter. This outcome is driven by a heavy reliance on imports, as Britain holds some of the smallest gas stores on the continent after decades of dependence on North Sea production.

Financial data from the Office for National Statistics shows the UK paid a record £4 billion on power imports over the year ending in August. Half of that expenditure went toward electricity imported from France. The country also made near-record payments to operate gas plants while compensating wind and solar farms to shut down due to grid bottlenecks.

Household budgets are also feeling the strain. Energy bills for British consumers are predicted to rise by 16% in January. This increase would bring the typical annual dual fuel bill to the equivalent of about £2,000.

European stock markets reacted positively to the slight dip in oil prices. The Stoxx Europe 600 index, which tracks major companies on the continent, rose by 0.3% in early Monday trading. The UK’s FTSE 100 index gained 0.4% during the same period.