Europe starts winter with its gas tanks a quarter empty, and Qatar's gas still cut off

What happened

Europe is heading into winter with less gas in store than usual. EU storage sites were 74.89% full on 29 October, according to Gas Infrastructure Europe data reported by Le Private Banker, against a five-year average of about 86% for that date. Germany, the largest consumer, was near 61%. The EU had set a flexible target of filling storage to 75% by 1 November, and only just reached it.

Prices reflect the squeeze. The Dutch TTF contract, Europe's benchmark, closed above €100 a megawatt-hour on 30 October for the first time since 2022. It has eased since, falling 2.6% on 10 November according to ICE data reported by ONA, but futures for winter delivery traded near €95 in late October, against an average of about €36 last winter.

Why storage is low

• Qatar is cut off. Since the Strait of Hormuz closed on 28 February, Qatar's liquefied natural gas (LNG) has been trapped in the Gulf. The US Energy Information Administration put the affected flows at about 20% of global LNG supply. QatarEnergy has extended its force majeure, a declaration that it cannot deliver, to the end of the year.
• Asia competes for the rest. Asian buyers took most of Qatar's gas and now bid for the same cargoes Europe needs, often outbidding it.
• Last winter was cold. Storage ended last winter at only 28% full, so Europe started the year with more to refill.
• Prices discouraged storing. For much of the year gas for immediate delivery cost more than gas for winter, which made buying to store unprofitable, a pattern called backwardation.

Why it matters beyond energy

Gas sets the price of electricity in much of Europe, so a gas shock spreads quickly into power bills, factory costs and food, through fertiliser. That is the same chain our energy shocks mechanic follows for oil: higher energy prices raise inflation directly, then indirectly, and squeeze spending on everything else. In 2022, when Russian gas was cut off, TTF peaked far higher than today; the difference this time is that Europe now uses less gas and has more import terminals.

Where it sits in the chain

This is Link 4, energy, feeding Link 1, inflation: low storage keeps winter gas prices high, which adds to euro area inflation just as the ECB weighs whether to raise rates.

What to watch

• The weather: forecasters expect a mild winter, which would limit withdrawals; a cold spell is the main risk.
• Weekly storage data from Gas Infrastructure Europe.
• Any reopening of the Strait of Hormuz to LNG tankers.