Europe is heading into the heating season with its lowest gas reserves in 13 years, raising concerns among traders about a significant rise in prices this winter.

European Union storage facilities were 63% full in the last week of August, compared with an average of around 80% over recent years. At the current rate of replenishment, reserves at the start of winter could be about one-fifth lower than the five-year average.

The situation has been worsened by the war waged by the United States and Israel against Iran, which has disrupted oil and gas exports from the Persian Gulf region. A cold end to last winter and increased electricity generation from natural gas during summer heat waves have also contributed to the decline in reserves.

Although a physical shortage of the commodity is not expected, traders are anticipating higher prices. The benchmark gas price has risen above €68 per megawatt-hour, more than double the level at the start of the year.

Concerns are greatest in Western Europe. German storage facilities are about half full, Belgian facilities are at 51%, and Dutch facilities are at 45%.

(Guardian, bak)