Natural Gas, Not Oil, Is Key Inflation Concern in Europe
Soaring energy prices have rekindled inflation fears in Europe since the Iran war disrupted oil and gas flows, but policy makers and bond markets appear to be more concerned about the jump in natural gas prices rather than the increase in crude oil futures. European benchmark natural gas prices have hit a five-month high in recent days, as Europe scrambles for LNG supply to fill gas storage sites ahead of the winter.
Why It Matters
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Key Facts
- Fact 1: Current storage levels are about 63% full, data from Gas Infrastructure Europe shows.
- Fact 2: The European Central Bank (ECB), which in June raised key interest rates for the euro area for the first time since 2023, is overwhelmingly expected to announce another hike in September, but stop the rate increases there.
- Fact 3: By Charles Kennedy for Oilprice.com More Top Reads From Oilprice.com Treasury Expands Iran Sanctions Without Targeting Major Chinese Banks Europe Dodges a Rhine Crisis for the Worst Possible Reason Oil Nears $100 as Trump’s ‘Economic D-Day’ Raises the Stakes
Soaring energy prices have rekindled inflation fears in Europe since the Iran war disrupted oil and gas flows, but policy makers and bond markets appear to be more concerned about the jump in natural gas prices rather than the increase in crude oil futures. European benchmark natural gas prices have hit a five-month high in recent days, as Europe scrambles for LNG supply to fill gas storage sites ahead of the winter.
Since the Middle East crisis began, Europe has started losing the competition with Asia for spot LNG supply amid spiking prices in the absence of most Qatari LNG term volumes. The Iran war and the intensified competition from Asia came just as Europe is trying to build in the spring and summer natural gas inventories for the next winter. Current storage levels are about 63% full, data from Gas Infrastructure Europe shows.
(Original synthesis pending human/AI review — generated by the stub provider by selecting real sentences from the source material, not by writing new analysis or commentary.)
Original source: OilPrice.com
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