With gas reserves unusually thin for this point in the year, Europe heads into winter bracing for higher energy bills, analysts have said. Benchmark European gas prices pushed toward a four-year high of 75 euros ($87) per megawatt hour last week and hovered around 73 euros on Monday.
The continent's storage was 66.6 percent full on Monday, well below the 80 percent average for this time of year, as seasonally low inventories and a squeeze on shipments through the Strait of Hormuz tighten supply.
Analysts at British consultancy Wood Mackenzie said disruptions to global fuel supplies, combined with thin gas inventories, exposed the market to greater volatility if fresh crises hit, reported The Daily Telegraph newspaper.
David Lewis, a senior research analyst at Wood Mackenzie, said, "The combination of Hormuz supply disruptions and below-average storage leaves Europe with very little room for error this winter.
"Storage normally acts as the market's shock absorber, but with inventories at their lowest for this time of year since 2009 and balances unlikely to normalize before 2028, the cost of a cold winter or a supply shock will be felt directly in prices."
