The price of European natural gas rose sharply today, reaching its highest level in over three months. The background is concerns about an escalation in the Middle East.
Due to the politically tense situation in the Middle East, the price of European natural gas has risen again and is more expensive than it has been in over three months. The landmark futures contract TTF for delivery in one month rose to 33.95 euros per megawatt hour (MWh) on the Amsterdam stock exchange on Wednesday. This is the highest price since the beginning of January.
The price of gas has been rising significantly for a week now. During this time, natural gas became more expensive by more than 20 percent. This means that the price decline in the first few months of the year has been offset again.
Mild winter, weak economy and full storage facilities
One reason for the price increase is investors’ fear of a new war in the Middle East, including possible effects on gas deliveries from the region. After Iran’s attack on Israel at the weekend, the commodity markets are waiting for Israel’s reaction and fearing an escalation of the situation.
Previously, among other things, an unusually mild winter and the weak economy in Europe had weighed on the price of gas. In February the price temporarily fell to 22.31 euros, its lowest level since last summer. In addition, Germany and other EU countries have now managed to replace gas from Russia, which accounted for the majority of gas supplies in Ukraine before the war began.
In addition, inventories are unusually high for this time of year. The fill level of all European gas storage facilities is currently 62 percent, as shown by the latest data from the European gas storage association GIE. According to the association, the average filling level over the past five years is usually only 43 percent at this point in time.