European gas traders are already betting on a price jump next summer - Bloomberg
Kyiv • UNN
European traders have begun hedging risks for the next gas storage season, forecasting a price increase to 50 euros per megawatt-hour by the summer of 2026. This is 60% higher than current figures, despite the expected increase in supplies in the coming years.
A flurry of bets on European natural gas contracts signals that some traders have already begun hedging risks for the next inventory accumulation season, even as supplies are expected to increase next year, Bloomberg reports, writes UNN.
Details
Options traded on Monday predicted that European gas prices could reach 50 euros next summer, a period when traders typically build up huge gas reserves in the region for winter. The opposite bet implies an increase of approximately 60% compared to current levels, which have been around 32 euros per megawatt-hour for the past few weeks.
While gas prices in Europe have fallen significantly in recent months, and stable supplies to storage facilities are easing fears about the region's readiness for winter, traders are still assessing supply prospects for the coming years, the publication writes. New liquefied natural gas projects are planned to be launched in 2026 and 2027, reinforcing a growing consensus among traders that prices will fall as the market gradually shifts from scarcity to surplus.
Meanwhile, the volatility of natural gas prices in Europe, it is noted, has decreased to levels observed before the 2022 energy crisis. Although this potentially creates a more attractive entry point for traders seeking to profit from sharp price fluctuations, actual fluctuations in futures have been restrained, the publication writes.
However, in the coming months, the European gas market, as the publication notes, will face a multitude of uncertainties that could affect next year's inventory accumulation campaign. A cold winter could lead to a depletion of reserves, complicating efforts in 2026.
Traders are also monitoring the impact any further sanctions on Russian energy could have on the markets. Currently, Europe plans to ban seaborne imports from the country from 2027. Any delays in launching additional production capacity in the US and Qatar could exacerbate market tensions, the publication indicates.
According to data compiled by Bloomberg, on Monday, trading included 2050 lots of monthly call options at 50 euros from April to September 2026 at a price of 0.81 euros.