European gas hits three-month high, storage half empty
European gas jumped to 55.06 euros per megawatt hour on Wednesday, the highest in more than three months, while storage sites are only about 52 percent full and filling slower than last year.
- European gas rose on Wednesday to 55.06 euros per megawatt hour, up 3.57 percent in a single day and the highest level in more than three months.
- European storage sites are around 52 percent full and filling more slowly than last year, below the historical average.
- Inventories sit roughly 22.5 percentage points below the five-year average for this date, a shortfall of about 247,500 GWh.
- Refilling before November 1, the start of the heating season, remains a challenge: Qatari supply is returning gradually in the third quarter and going first to the Gulf and Asia.
European gas traded at 55.06 euros per megawatt hour on Wednesday, up 3.57 percent in a single session and the highest level in more than three months. Dutch TTF day-ahead reached almost 53 euros per megawatt hour, its firmest in months. The move is not isolated: power prices and emission allowances rose alongside gas, spreading the increase across the whole energy complex.
Three drivers are pushing prices up at the same time. The first is geopolitical risk around the Strait of Hormuz, which threatens liquefied natural gas supply and builds a premium into every contract for autumn delivery. The second is the heat, which lifts electricity demand for cooling and indirectly calls for more gas in power plants. The third, and the most durable, is below-average storage.
The number that defines the rest of the year is 52 percent. That is how full European storage sites are in mid-July, at an injection pace slower than last year. According to EnergyRiskIQ data, inventories are about 22.5 percentage points below the five-year average for this date, a shortfall of roughly 247,500 GWh, or around 23 billion cubic metres of gas when converted. Europe simply entered the injection season in a much weaker position than in previous years.
Why is refilling before November 1 becoming a problem?
Because the deadline does not move and supply is late. The recovery in Qatari volumes during the third quarter is real, but it is gradual and it covers Gulf and Asian markets first. European buyers are unlikely to see those cargoes before the start of the fourth quarter, meaning right at the edge of the heating season. The practical consequence is that Europe has fewer weeks and a more expensive commodity to store the same volume.
When supply is late and the deadline holds, the market responds through price alone. Contracts for autumn and winter delivery carry a premium precisely because of that narrow window, and every additional geopolitical incident widens it. A 3.57 percent jump in one session is therefore not an anomaly but the logic of a market buying insurance in advance.
Who pays the difference
The bill reaches the consumer, but with a lag. Serbia buys gas on a market tied to European hubs, so the July price on TTF is an input for winter import arrangements, not for the July bill. On top of that, higher emission allowances and power prices mean pressure appears in two places: in the cost of the fuel and in the cost of generation from plants that burn it.
For industry the consequences are more measurable and arrive faster. Producers with energy-intensive processes, from chemicals to glass and metals, are contracting winter volumes now, at the highest price in three months. Margins narrow before a single heating bill is issued, and working capital goes into fuel inventory instead of production.
The next storage data are published weekly and will show clearly whether 52 percent is a floor or a trend. If the injection pace does not accelerate through August, the arithmetic running to November 1 turns uncomfortable.
Do you think Europe will manage to fill its storage before the heating season begins?
