European natural gas futures climbed for a second day as countries began drawing on stockpiles already at exceptionally low seasonal levels.

Brussels is now left hoping that Greta Thunberg’s global warming narrative is real to ease pressure on the region’s fragile energy balance. Even then, one or two severe cold snaps could accelerate inventory depletion, intensify competition for LNG cargoes and push the energy-stricken continent toward another winter crisis, particularly if disruptions around the Strait of Hormuz continue to constrain LNG supplies.

Gas Infrastructure Europe data showed that EU NatGas inventories declined for the first time this year.

Storage sites are about 74% full, well below the 15-year average for this time of year and, according to Bloomberg data, at the lowest seasonal level in records dating to 2009. Germany’s gas storage sites are just 61% full.

Dutch front-month futures, Europe’s benchmark, breached 90 euros a megawatt-hour around 9:42 London time. Prices reached their highest since late 2022 earlier this week (read report) and have nearly tripled compared with last winter, increasing pressure on industry, freight and, of course, households.

The smaller buffer leaves Europe increasingly dependent on the international market, where it must compete with Asian buyers. This suggests TTF prices will have to rise sharply as the Hormuz maritime chokepoint remains chaotic.

Mild October weather across the bloc has eased heating demand and allowed utilities to stockpile additional reserves. The latest forecasts show warmer conditions returning to northwest Europe next week, though temperatures will fall next month, offering a warning of what lies ahead as the Northern Hemisphere enters the winter period. 

Perhaps Europe will experience a slightly warmer-than-average winter because of strong El Niño conditions. But now is when elites in Brussels, who endlessly pushed the global warming narrative for years, must hope they are right. If they are not, all it could take is several cold snaps this winter to deplete inventories across the bloc to dangerously low levels, leaving less cushion to absorb shocks.

Goldman Sachs commodities expert Daan Struyven warned earlier this week that EU natural gas prices could soar to 150 euros if Gulf LNG exports remain at just one-quarter of normal levels and a more severe winter boosts heating demand. The full report can be read here.