European natural gas prices are trading near their highest level in more than three years as the race to replenish storage puts a bid under prices, while ongoing disruptions through the Strait of Hormuz intensify competition for scarce LNG cargoes ahead of winter.
On Tuesday morning, European natural gas benchmark futures edged up nearly 3% to trade around 75 euros per megawatt-hour, the highest level since early January 2023.
Bloomberg reporter Priscila Azevedo Rocha noted, "Europe needs higher gas prices in order to attract more seaborne cargoes to its shores, but with less than a month left until the heating season, the region’s inventories are still lagging behind."
Rocha's view was very similar to the assessment in Goldman Sachs commodities expert Samantha Dart's note last week, in which she said December 2026 TTF prices may need to exceed 100 euros per megawatt-hour to discourage Asian LNG demand.
"We have argued that, in the absence of an improvement in LNG exports through the Strait of Hormuz (SoH) (Exhibit 1), European gas prices (TTF) would need to rise to discourage Asia LNG demand, thereby freeing incremental cargoes to be sent to Europe to help manage European gas storage levels," Dart explained.
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