European equity investors keep watching gas prices

RBC does see small reasons for optimism in the build-out of solar and wind capacity. The firm says these are less helpful at peak times due to seasonality — Jan. 2026 demand saw a nine-year high of 136 TWh — but "the past three spring shoulder seasons have experienced the lowest demand for gas over the past decade, allowing for higher flexibility at the start of injection season."

Barclays' Emmanuel Cau, who takes a look at what this means from a stock market perspective, says that this is "not a repeat of 2022 yet".

Clearly, that's partly to do with the price. Gas spent much of 2022 above 100 EUR/MWh, and rose above 300 EUR/MWh at times, but also, Cau says, "EU corporates have made meaningful progress in diversifying their energy mix and have become more adept at operating in a higher energy cost environment."

He adds: "At the same time, the ongoing recovery in German activity, supported by fiscal stimulus, should continue to provide a cushion to regional demand."

The rise in European gas prices is starting to worry investors, particularly given how low storage levels are for the time of year, but the view from analysts in a splurge of notes in the past 24 hours is that this is one to be cautious about, rather than panic about, at least for now.

Front-month European benchmark gas prices (TTF) are up 12% this week so far and at their highest since late 2022 as the war in the Middle East intensifies.

Goldman on Thursday raised its TTF forecast to 70 EUR/MWh, just a touch below current levels, saying that Europe will have to pay prices of that level to draw LNG cargoes away from Asia to replenish inventories.

EU inventories sit at 67%, compared with around 80% at this time last year, and are just 55% for Germany, RBC analysts said, "potentially creating an environment for even higher energy prices come January."