European gas prices hit 100 euros for first time since 2022

LONDON - European natural gas prices climbed to the highest level since 2022 on Oct 28, topping €100 (S$143) per megawatt-hour, driven by concerns over the Middle East war and the need to fill reserves ahead of winter.Around 1455 GMT (10.55pm in Singapore), the Dutch TTF futures contract – the benchmark for European gas – rose more than 4% to reach €100.45 per megawatt-hour.Prices remain far below the peaks of the 2022 energy crisis triggered by Russia’s invasion of Ukraine, when they reached €345 per megawatt-hour in March that year.The jump in gas prices on Oct 28 reflected concerns that the United States could launch a new wave of strikes on Iran after next week’s midterm elections, risking a retaliation by Tehran on energy infrastructure in the Gulf.Exports of liquefied natural gas (LNG) from the Gulf remain very limited, according to analysts.“Concerns about renewed escalation in the Middle East are driving prices higher,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.“However, weather forecasts are also providing support,” he added, as Europe is set for lower wind and solar generation, increasing demand for gas.Overall, European countries are consuming less gas than in 2022 as they increasingly switch to renewables to generate electricity.Analysts believe this shift reduces the risk of a gas price spike translating into hikes for electricity bills as severe as those seen in 2022. AFP