European gas price risen to almost 98 euros per megawatt-hour

Amsterdam - The price of European natural gas hit a new high last Monday, briefly surpassing the 100 Euro mark per megawatt-hour (MWh). The leading gas futures contract TTF for monthly delivery fell to 97.64 Euro per MWh on the Amsterdam exchange, marking nearly a three percent increase from the previous Friday and the highest price since late 2022.

Gas prices have been climbing steadily since the start of the month, with the overall increase exceeding three times year-to-date. The gas price had already surged significantly at the beginning of the Ukraine conflict, reaching more than 300 Euro per MWh for a brief period. The latest price hike adds pressure on consumers and industry.

For instance, in Baden-Württemberg, private households experienced a 22 percent rise in gas prices over the past year, according to an analysis by the comparison portal Verivox published in Heidelberg. Gas supply is typically regulated through long-term contracts, which means it takes considerable time for high world market prices to affect household bills.

The major driver of the price increase is the Iran war, as one of the world's most important routes for liquefied natural gas transport passes through the Hormuz Strait, near Iran. Another factor is the increased replenishment of Germany's gas reserves before winter. Germany has been working hard over recent weeks to boost its gas reserves, with storage levels now exceeding 61 percent, up from around 75 percent a year ago.