European natural gas prices have surged significantly in November, with the Dutch Title Transfer Facility (TTF) benchmark rising 16% to €46 per megawatt-hour (MWh), its highest level in over a year. This sharp increase highlights the region’s ongoing struggles to stabilize energy markets as winter approaches.
Unseasonably cold weather across Europe and parts of North America has driven up heating demand earlier than anticipated. Sub-zero temperatures in northwest Europe and the U.S. Northeast have created a spike in energy use, putting pressure on gas supplies. Compounding the problem is reduced wind power generation, which has forced utilities to rely more heavily on gas-fired power plants. As a result, Europe’s gas storage levels have fallen below the five-year average for the first time this year.
Geopolitical factors are further fueling the price surge. Gazprom recently halted gas deliveries to Austria, raising fears of broader supply disruptions. In addition, the looming expiration of a key Russia-Ukraine pipeline transit agreement at the end of the year threatens a vital route that supplies 5% of Europe’s gas needs. If the agreement lapses without a replacement, countries in central and eastern Europe could face critical shortages during the winter months.
Analysts warn that the combination of heightened demand and tightening supply could push prices even higher. Goldman Sachs recently revised its 2025 TTF price forecast upward to €40/MWh, citing reduced supply flexibility and stronger heating demand. The bank has also highlighted extreme scenarios—such as delays in LNG projects, increased competition from Asian markets, or colder-than-expected weather—that could send prices soaring to €77/MWh. At that level, many sectors might be forced to shift from gas to oil-based alternatives.
The economic implications of rising gas prices are considerable. Households and industries across Europe are likely to face higher energy costs, potentially slowing the region’s economic recovery and adding to inflationary pressures. Energy-intensive industries, such as manufacturing and chemicals, may struggle to remain competitive on the global stage as operating costs rise. Policymakers are under increasing pressure to intervene, either by subsidizing energy costs or accelerating the transition to renewable energy to reduce reliance on volatile fossil fuel markets.
Although current gas prices remain far below the historic highs of summer 2022—when TTF reached nearly €350/MWh—the recent surge underscores Europe’s continued vulnerability to weather extremes and geopolitical uncertainty. With winter just beginning, the region faces significant challenges in balancing short-term supply needs with long-term energy security goals.
