Gas Hits €97 As Storage Nears Winter Low

European wholesale gas traded at €97 (£81) per megawatt-hour on Monday, the highest level since 2022, as colder temperatures across the continent pushed traders to price in heating demand. The UK month-ahead contract climbed 4% to 240p a therm, its top reading since December 2022, when prices surged after Russia's invasion of Ukraine.

The move coincides with reports that the United States and Israel have prepared plans for renewed strikes against Iran following the US midterm elections. Those reports pushed oil as high as $117 a barrel on Friday. Brent crude eased about 2% on Monday but held above $114.

Europe is entering winter with stored gas at its lowest level in more than a decade, at roughly 75% full against a seasonal norm closer to 80%. Two factors drove the shortfall: slower exports from Qatar and higher summer consumption to power refrigeration and cooling systems.

Britain's regulator has said the country will pay some of Europe's highest energy costs this winter, citing dependence on imports to keep supply steady. The UK holds some of the smallest gas stores on the continent after decades of drawing on North Sea production. The Office for National Statistics reported £4bn spent on power imports in the year ending in August, with half of that sum going to electricity bought from France.

British households face a projected 16% rise in January, bringing a typical annual dual fuel bill to roughly £2,000. Over the past year the country has also paid near-record sums to run gas plants while wind and solar operators were paid to stop generating, because of grid bottlenecks.

European equities moved up slightly on Monday as oil eased. The Stoxx Europe 600 added 0.3% in early trading and the UK's FTSE 100 gained 0.4%.