European Gas at 100 Euros per Megawatt-Hour

European natural gas hit triple digits today for the first time since December 2022, with TTF futures touching 100 euros per megawatt-hour.

The move reflects a thin winter buffer (chart below). EU storage was 74.9% full on Oct 26, a record low for the date, 8 points below last year and 14.6 below the five-year average. Injections have nearly stalled, up only 0.‌‌3 points in a week, and Austria, Slovakia, the Czech Republic, France and Belgium are already pulling gas out, while Germany, the largest storage holder, is only at 61.7%.

Europe is short because it started the refill season at 27.7%, lost Qatari LNG, and faced Hormuz disruption while competing with Asia for the ‌‌cargoes that were left. The EU’s relaxed 80% target also took the urgency out of summer buying, and storage is below even that.

The risk skews to the upside because the buffer is small. A cold blast is expected in parts of continental Europe early next month, and any new disruption in the Gulf would hit a market with little storage to absorb it.

Wood ‌‌Mackenzie’s Tom Marzec-Manser calls 100 euros a psychological level that could slow further gains, but says it will not take much to push prices higher given Middle East developments and the US midterms. Goldman’s Daan Struyven sees 150 euros by year-end if Persian Gulf LNG exports stay below 25% of normal and the winter runs one standard deviation colder than average.