European benchmark gas prices hit a fresh Iran wartime high on Tuesday, as the stand-off between Donald Trump and Volodymyr Zelenskyy over Russian diesel unsettled markets at a time when colder weather is forecast across central Europe over the coming two weeks. Dutch TTF gas futures hit €86.50 per megawatt hour, rising for a sixth consecutive day to reach their highest level since before the US and Israel began their war on Iran at the end of February. Low gas storage levels at the beginning of the winter demand season have made Europe vulnerable to high prices, said Ole Hansen, head of commodity strategy at Saxo Bank. "Unfortunately, it only took a small drop in temperature to lift prices, highlighting how challenging the coming winter may become," he said.
European prices have risen from about €32 per MWh on the eve of the Iran war, a rise of 170 per cent and their highest since the aftermath of Russia’s 2022 invasion of Ukraine. Trump posted on his Truth Social platform on Sunday that Russia and Ukraine had agreed to an "energy ceasefire", two days after announcing a deal with Moscow to import Russian diesel. In response, Zelenskyy signalled on Monday that Kyiv’s attacks on Russian refineries would continue.
Colder than usual temperatures, particularly in central Europe, are expected to push gas demand higher this month as people heat their homes. The forecast cold snap is expected to coincide with low wind speeds, which would curtail power production from wind turbines. European gas storage facilities are currently less than 74 per cent full, far lower than normal levels of about 90 per cent for this time of year.
Europe’s winter heating season officially began on October 1.
Source: Financial Times Companies · Summarized by HeadlinesBriefing