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European gas prices likely to stay elevated despite sustained Hormuz reopening
Commerzbank cited European storage near 52%, expectations for storage to peak around 75% by end of October, and stronger Asian LNG demand tied to El Niño.
European gas prices are likely to remain high in the near term even if the Strait of Hormuz stays open on a sustained basis, according to analysis highlighted by FXStreet that draws on Commerzbank’s outlook from Norman Liebke.
The bank points to a still tight LNG market, saying LNG supply is expected to stay below pre Iran war levels for some time, with European gas storage levels described as low and Asian LNG demand expected to strengthen due to El Niño.
Commerzbank also flagged storage as a key driver, noting storage is currently around 52%, about 15 percentage points below the five year average, and projected to peak at roughly 75% by the end of October, which would be the lowest level since the available data series began in 2009.
Finally, Commerzbank linked the outlook to expected extreme weather in coming months, particularly in Asia, where higher electricity demand from extreme heat could lift gas demand for power generation, supporting elevated gas prices for longer.