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A warmer November could see Europe's commodity price change direction

People shelter from the rain under their umbrellas, in San Sebastian, northern Spain, Thursday, Nov. 2, 2023.
People shelter from the rain under their umbrellas, in San Sebastian, northern Spain, Thursday, Nov. 2, 2023. Copyright AP Photo
Copyright AP Photo
By Angela Barnes
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Natural gas prices in Europe rose 15% in October and touched an eight month high last week as the cooler weather, in addition to other fundamentals, supported the commodity.


The ongoing conflict in the Middle East has also impacted the price of natural gas after the closure of the Tamar field in the Mediterranean Sea. Moreover, there are concerns about the security of Qatari liquified natural gas (LNG) vessels passing through the Strait of Hormuz.

Increased Chinese appetite for LNG, which has risen 6% this year, is also likely to increase natural gas prices in Europe as competition for it gathers pace.

At the time of writing, Europe’s benchmark Dutch December gas contract on the TTF intraday chart was up 2.85% at €49.95 per megawatt hour (MWh). Although the price is higher, it is much lower than the €120 mark it was trading at this time last year.

However, according to data from Trading Economics, gas inventories in Europe remain around 99% full and warmer weather is forecast across the continent for the first week of November, which could subsequently put downward pressure on gas prices as heating demand subsides.

Europe short-term weather forecast

November is expected to be a warmer and wetter month across Europe with Germany, Poland and much of the Balkans set to be milder than usual.

Temperatures will be on average 6°C above the seasonal average for the first part of the month with many weather outlets are also forecasting the return of El Niño, which refers to when waters in the Pacific Ocean become much warmer than usual.

During the phenomenon, the global temperature increases by around 0.2 degrees Celsius, according to the US National Oceanic and Atmospheric Administration (NOAA).

The warmer weather forecast subsequently results in less demand for natural gas which helps to stabilise the price of the commodity on the markets as investors consider the fundamentals weighing on the price.

Europe natural gas price outlook

Michael Baker, head of UK premium clients at, told Euronews that the complex dance of supply and demand, weather patterns, geopolitical tensions and general trader sentiment are collectively affecting the price of natural gas.

“With the storage of gas across Europe and the UK looking a lot healthier than last year, and without any signs of a short- term snap to cold weather, prices may resist popping higher,” he said. “With traders' seasonality mentality being sharply tested, we may see the unwinding of positions causing pressure on the price.”

Baker also noted that if the Middle East war escalates further, prices could push a lot higher. However, he said if the weather remains mild moving into November, as forecast, then we could see a drop in price.

Osama Rizvi, economist and energy analyst at Primary Vision Network, highlighted to Euronews how the gas markets appear to be among the most vulnerable due to the ongoing conflict in the Middle East.

“However, there are many factors that suggest that sans a full blown war, the prices will come down to their previous levels. First of all, European inventories are 99 percent full.”

“Secondly, the industrial gas demand in Europe is also low. For instance, in Germany the industrial demand fell hy 54 TWh in the first six months of the year while household burn reduced by 37TWh. Profits have fallen as well,” he added.

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