European Gas Prices Hit 2022 Highs as U.S. Prices Plummet
European natural gas prices surged to a four-year high amid supply disruptions, while U.S. futures fell 15% due to unseasonably warm weather.
Natural gas markets diverged sharply as European Union prices climbed to their highest levels since late 2022, while U.S. futures suffered their largest weekly decline in eight months. European prices rose above 97 euros per megawatt-hour on Monday, driven by colder weather and supply disruptions in the Strait of Hormuz. These disruptions have curtailed liquefied natural gas exports from Qatar and the United Arab Emirates, intensifying competition for cargoes between European and Asian buyers.
European Union gas inventories stood at 74.6% capacity as of Sunday, recording their first net decline last Tuesday. Analysts project an 11% shortfall in LNG imports by the end of October compared to previous year levels. Some experts warn that prices could climb as high as 150 euros per megawatt-hour if Gulf exports remain restricted.
In contrast, U.S. natural gas futures fell 15% to settle at $2.64 per million British thermal units for the November contract. This decline is attributed to El Niño weather conditions, with forecasts predicting above-average temperatures across the Lower 48 through early November. The Commodity Weather Group expects October and November to be the third-warmest period since 1950, significantly depressing heating demand.
