Natural gas prices in Europe are at the highest level since January 2023

In the Netherlands-based TTF, which is considered the reference for natural gas pricing in Europe, the megawatt-hour price of natural gas in October futures contracts closed at 66.97 euros on Friday.

As of 11.34 am today, prices increased by 4.4 percent compared to the previous close, reaching 69.90 euros.

Thus, natural gas prices exceeded 69 euros, reaching the highest level since January 2023.

Low storage level supports prices

According to Gas Infrastructure Europe (GIE) data, the occupancy rate of natural gas tanks in the European Union countries is at 64.7 percent.

The fact that storage levels are below historical averages for this period of the year increases concerns about completing stocks before winter.

Although weather forecasts predicting more moderate temperatures for the beginning of September limit demand expectations, low storage levels, uncertainties regarding LNG supply from the Gulf and risks to the Strait of Hormuz put upward pressure on prices.

The US army's attack on two targets on Lark Island last night and the Iranian press reporting that missiles were fired at targets in the region after the attack also increased supply concerns in the markets.

These developments took place after the ongoing mediation attempts between the USA and Iran failed to resolve the dispute between the parties.

Europe-Asia competition for LNG comes to the fore

The fact that the conflicts in the Middle East negatively affect LNG exports in the Gulf region, especially the shipments of Qatar, one of the important producers, increases concerns about the global supply outlook.

It is considered that if LNG exports from the Gulf are disrupted for a long time, Europe may have to compete with buyers in Asia for more LNG cargo.

Analysts evaluate that Europe may have to compete more with buyers in Asia, especially if LNG exports from the Gulf are disrupted for a longer period of time, and this may put upward pressure on natural gas prices in the future.