European natural gas held near its highest levels since 2022 as traders work to refill depleted stockpiles, with the start of the heating season approaching and no resolution in sight for the crisis in the Middle East. Benchmark futures climbed as much as 4%, before paring gains to trade near €81 a megawatt-hour. Europe needs elevated prices in order to attract more seaborne gas cargoes to its shores and replenish inventories that are far below the seasonal norm.

Storage facilities across the region are languishing around 68% full, with sites in Germany — Europe’s largest energy market — at just 56%. Traders are closely monitoring buying activity from the country after Bloomberg reported that the government had held talks with state-owned energy companies about supporting stockpiling efforts. Concerns about Europe’s low storage are also driving up gas prices for next year.

Contracts for summer 2027 are more expensive than those for the following winter, with the premium widening to a record this week. That will make refilling inventories uneconomical, suggesting summer stockpiling will be challenging for a third year in a row if global supplies remain tight. Meanwhile, the US-Iran war — which continues to cut off about a fifth of the world’s liquefied natural gas flows — shows no sign of ending any time soon.

President Donald Trump said this month that the conflict would end after the US midterm elections in November, an assertion backed by Vice President JD Vance in an interview with the New York Post. European gas prices have almost tripled so far this year, stoking inflation and threatening the continent’s already fragile economic outlook. LNG demand from Asia is setting the stage for more intense bidding wars when colder weather sets in.

There’s a risk European gas could approach €100 a megawatt-hour this winter — about 20% above current levels — given sustained disruptions to supplies from the Middle East and Europe’s historically low storage levels, Bloomberg Intelligence analyst Patricio Alvarez said in a note. Further escalation of the conflict could even drive prices above €120, he said. Dutch front-month futures, Europe’s gas benchmark, traded up 1.3% at €81.10 a megawatt-hour as of 9:11 a.m. in Amsterdam.