European wholesale natural gas futures resumed their upward trajectory on Tuesday, rising back toward their highest levels since 2022 as an escalation in Middle East geopolitical tensions and direct attacks on Saudi energy infrastructure injected a fresh risk premium.
The benchmark rose 1.22% to trade at 89.12 euros per megawatt-hour (MWh). In Great Britain, the equivalent advanced 1.2% to 219.76 pence per therm, with both benchmarks consolidating at late-2022 peaks.
Energy trading desks re-priced supply risk after Yemen’s Houthi movement confirmed coordinated drone and missile attacks targeting critical Saudi Arabian infrastructure. Key targets included an Aramco oil processing facility in Yanbu, the Shaybah field, and airport and military infrastructure in Abha and Riyadh.
The strikes have further heightened maritime navigation anxieties through the Red Sea and Persian Gulf corridors. Seaborne Liquefied Natural Gas (LNG) deliveries transiting the Strait of Hormuz remain severely constrained, forcing extended carrier reroutings around Africa and reducing spot arrival volumes at European regasification terminals.
Low European storage levels at 74% leave continent exposed
While investors continue to weigh the demand-destroying impact of elevated European Central Bank borrowing costs, downside price discovery remains tightly capped by structural inventory shortfalls.
Underground European Union gas storage facilities sit at approximately 74.1% capacity, well below historical norms for mid-October. Storage caverns in key industrial hubs like Germany lag further behind at roughly 60% full.
With Middle Eastern LNG flows into Europe remaining roughly 80% lower than year-ago levels due to shipping bottlenecks, European utilities face intensifying competition from Asian buyers for uncommitted Atlantic basin spot cargoes ahead of winter drawdown.
Source: Investing.com
