Europe Gas-Prices rise on continued Middle East conflict, low storage levels
UNG•Carbon market also higher
In the European carbon market, the benchmark contract rose by €0.15 to €84.88 a metric ton.
Analysts say Europe must keep outbidding for LNG
Europe’s gas prices will need to remain high to attract LNG cargos, analysts at Engie EnergyScan said.
“Unless Qatari LNG exports resume or Asian buyers' willingness to pay declines, European buyers have no choice but to keep outbidding,” they said in a daily research note.
Middle East tensions and supply risks support prices
“The situation in the Middle East remains tense. Shipping traffic through the Strait of Hormuz has reportedly slowed following Iranian warnings of retaliation in the event of further US military action,” LSEG analyst Yuriy Onyshkiv said.
Iran threatened the U.S. with "economic warfare" and said it fired an advanced missile at U.S. warships while Iran-backed Houthis struck several Saudi cities, wounding 73 people and causing some energy facilities to halt operations.
Low gas storage levels are also contributing to high gas prices. Europe’s gas stores are 66.90% full, latest data from Gas Infrastructure Europe showed.
“This leaves Europe very exposed to possible future shocks, either from the supply side, such as further LNG disruption, or the demand side, such as a cold snap,” said Andy Sommer, head of energy market analysis and meteorology at Axpo.
Germany's gas storage industry association INES said on Tuesday the country risks potential gas shortages this winter due to low storage levels.
