Europe Gas Prices Hit 2022 Peak at €97 Amid Low Storage

European wholesale gas prices reached €97 per megawatt-hour on Monday, the highest level recorded since 2022. The spike follows a drop in temperatures across the continent and growing anxiety over winter supply security.

In the United Kingdom, the month-ahead gas contract climbed 4% to 240 pence per therm. This marks the most expensive trading level since December 2022, when prices surged in the immediate aftermath of Russia's full-scale invasion of Ukraine.

Market volatility is also fueled by reports that the United States and Israel are preparing plans for renewed strikes against Iran following the US midterm elections. These developments drove oil prices to $117 a barrel on Friday. The Brent crude benchmark retreated 2% on Monday but still holds above $114 a barrel.

Europe enters the winter season with gas storage facilities at their lowest capacity in over ten years. Current storage levels stand at approximately 75%, well below the seasonal average of 80%. Officials and analysts attribute this shortfall to a slowdown in exports from Qatar and increased summer consumption for cooling and refrigeration.

British energy regulators warn that the UK will face some of the highest energy costs in Europe this winter. The country relies heavily on imported gas to maintain supply stability, a vulnerability exacerbated by small domestic storage reserves following decades of reliance on North Sea production.

Data from the Office for National Statistics shows the UK spent a record £4 billion on power imports in the year ending in August. Half of that expenditure covered electricity imported from France. The grid also required near-record payments to restart gas plants while wind and solar farms were compensated for curtailment due to network bottlenecks.

Households in Britain expect a 16% increase in energy costs in January. This rise would set the typical annual dual fuel bill at the equivalent of £2,000. European stock markets showed slight gains on Monday, with the Stoxx Europe 600 rising 0.3% and the FTSE 100 up 0.4% in early trading.