European wholesale natural gas prices surged to more than 97 euros per megawattuur on the TTF exchange, creating a divergence with the United States where Henry Hub gas sank to the equivalent of 7.6 euros.
Why is European gas so much more expensive than American gas?
European inventories are hovering below 75 percent, falling short of the 80 percent target. Matthias Detremmerie, expert at energy supplier Elindus, noted that Europe faces crisis-level winter prices akin to 2022 but with significantly weaker storage buffers. Gas is already twelve times more expensive in Europe than in the United States, as American households and industry benefit from wholesale prices on the Henry Hub dropping to the equivalent of 7.6 euros per megawattuur—marking the lowest level in two years, supported by mild weather forecasts, robust domestic gas storage, and high production. Meanwhile, the heating season has commenced in Europe amid unconvincing inventory levels, and investors are growing concerned about the impact of cold weather across the European continent in the upcoming days.
How are energy-intensive industries coping with the price shock?
Energy-intensive manufacturers face severe economic pressure, having already absorbed four years of elevated costs following the previous energy crisis. Gert Verreth, spokesperson for chemical federation Essenscia, explained that while industries traditionally offset higher European energy prices through greater efficiency, the current gap has become impossible to bridge. The situation is growing increasingly precarious for European industries heavily reliant on natural gas, which struggled to compete even before the Middle East conflict began.
What does this mean for household energy bills?
Consumer costs are climbing sharply as household contracts reflect the wholesale surge. Testaankoop calculated that fixed contracts for average gas and electricity usage now cost nearly 1,000 euros more per year than they did in April. Variable contracts adjust every month or every three months, prompting suppliers to raise advance payment requests.
Will energy prices stay high throughout 2027?
Market projections indicate that relief will not arrive quickly. Electricity futures for delivery in 2027 have climbed above 150 euros per megawattuur, more than double pre-conflict levels. Traders anticipate potential conflict escalations in the Middle East following the early November midterms, keeping forward prices elevated across the board. Consumers must account for prices remaining high throughout the entirety of 2027.
Keep reading