Natural gas prices in Europe have surged more than threefold since the start of 2026 as supply woes hover over the market. The continent is preparing to enter the year’s winter season with reduced LNG supply from the Persian Gulf and storage levels that are well below the norm.
Europe’s natural gas prices extend gains to multi-year highs
Dutch TTF futures, the benchmark for natural gas prices in Europe, have rallied by over 200% year-to-date as shipping disruptions along the all-important Strait of Hormuz weigh on supply. The geopolitical conflicts have trapped about 20% of global LNG exports from the UAE and Qatar.
On early Monday, European natural gas prices extended its gains to a level last recorded in December 2022 before easing slightly. Notably, it has been in the green for 12 out of the past 17 weeks as the market weighs the ongoing supply/demand imbalance.
On the one hand, several LNG-producing countries have ramped up their exports. For instance, in September, US LNG exports rose to 10.9 million metric tons from the previous month’s 10.7 million metric tons. The exporters are taking advantage of the rise in global natural gas prices and the suitable weather conditions along the country’s Gulf Coast.
During the summer months, production tends to face heat-related challenges. The cooler weather experienced in recent weeks has improved the situation, with over half of the US LNG exports being directed to Europe. The region is competing with Asia, which is also aggressively attracting US cargoes.
Even with the increased US LNG exports to Europe, the persistent disruption of LNG flows from the Persian Gulf has made it difficult for the region to rebuild its inventories. The Middle East natural gas supply squeeze, coupled with inventory levels that are still below average, has sustained Europe’s natural gas prices close to its multi-year highs.
As Europe heads into this year’s winter season, storage facilities within the region are at 73.94%, which is still below its historical averages. Germany, which has the largest storage capacity in the continent, is only about 50% full. At its current pace, it is expected to fall short of its storage target of 70%.
The Netherlands also has particularly low inventory levels, while France, Italy, and Poland are well stocked. The European Union required its member states to have their LNG storage facilities atleast 80% full by the start of November, as that is considered the end of the restocking season.
Dutch TTF natural gas price technical analysis
Dutch TTF natural gas price chart | Source: TradingView
The benchmark for natural gas price in Europe – Dutch TTF futures – is at the periphery of the overbought territory at an RSI of 69. Besides, the bullish golden cross pattern formed by the 25 and 50-day EMAs has been in place for over three months now.
Based on both the fundamentals and technical indicators, a corrective pullback is likely. With this thesis, the support at 84.74 euros per MWh is worth watching. Further losses may be curbed at 83.98 euros. On the flip side, further rallying will likely place the next target at 88.93 euros.
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