With the heating season approaching, storage levels still need replenishing, and with no resolution in sight for the Middle East crisis, European gas prices remain at their highest point since 2022.

Benchmark futures rose as much as 4% before paring gains, trading near €81 per megawatt-hour. Europe needs sustained high prices to attract more seaborne gas cargoes and fill inventories, which are well below the seasonal norm.

Across the region, gas storage facilities are only about 68% full. In Germany, Europe's largest energy market, the fill rate sits at just 56%. Bloomberg previously reported that the German government has been in talks with state-owned energy companies about support measures for storage, with traders closely monitoring the country's purchasing activity.

Concerns over low stockpiles are also driving up prices for next year. The gap between the summer 2027 contract and the following winter contract widened to a record this week, making refilling economically unattractive. This suggests that if global supply remains tight, summer storage challenges could persist for a third consecutive year.

Meanwhile, the US-Iran conflict continues to disrupt roughly one-fifth of global liquefied natural gas flows, with no near-term end in sight. President Trump said this month the conflict would conclude after the November US midterm elections, a view echoed by Vice President JD Vance in an interview.

European gas prices have nearly tripled this year, fueling inflation and weighing on an already fragile economic outlook. Demand from Asia for LNG signals that global competition for gas will intensify as temperatures drop.

Analyst Patricio Alvarez noted in a research report that with ongoing supply disruptions in the Middle East and historically low storage levels in Europe, prices could approach €100 per megawatt-hour this winter—about 20% above current levels. Should the conflict escalate further, he added, prices could even break through €120 per megawatt-hour.