EU Gas Storage at 17-Year Low... LNG Prices Surge

Driven by a surge in liquefied natural gas (LNG) prices following the Middle East conflict, Europe is facing difficulties in stockpiling gas ahead of winter. As of the 3rd, Europe's gas storage fill rate recorded 57.1%, the lowest level since statistics began in 2009. The benchmark Dutch TTF futures price for natural gas stood at €56.30 per megawatt-hour (MWh), a surge of over 70% since the outbreak of the war.

As summer prices rose above winter prices, European energy companies lost the incentive to stock up by buying at market lows.

Supply disruptions of LNG from the Middle East have led to an increase in Europe's imports of Russian gas. According to the German non-profit organization Urgewald, Europe’s imports of Russian LNG increased by 16% year-on-year in the first half of this year, with the EU paying a total of €596 million to Russia for gas during the same period. Belgium reportedly sourced its entire 400,000 tons of natural gas imported last month from Russia, while France and Spain are also among the nations increasing their imports of Russian supply.