European natural gas prices climbed above €96/MWh on Wednesday, reaching their highest level since late 2022, amid growing anxiety over winter supply and the ongoing conflict in the Middle East. Reports that the United States has instructed several Persian Gulf states to prepare for a possible new military campaign against Iran after the US midterm elections have introduced an additional risk premium into the market. Traders are also closely watching the Israeli election, which could influence the trajectory of the US confrontation with Iran.
The conflict has disrupted LNG exports from the Gulf, which normally provide about one-fifth of global supply, complicating Europe’s efforts to restock its reserves. Gas storage sites across the region are roughly 75% full, the lowest level for this point in the year in data going back to 2009. At the same time, forecasts point to falling temperatures across the continent, likely boosting heating demand in the days ahead. Unplanned outages in Norway are further aggravating supply concerns.
