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European natural gas prices are displaying increased uncertainty, with investors placing higher bets for the upcoming months due to growing concerns about Chevron’s operations in Israel and Australia, which are casting a long shadow over the market outlook.

European natural gas benchmark Dutch TTF’s price was up by more than 10% compared to last week and more than 38% compared to last month, as of 11 CET on Wednesday. 

The price for a November 2023 delivery was close to €50 per megawatt-hour, the highest since April, following a 15% surge on Monday, amid increasing supply concerns. 

US oil giant Chevron Corp has stopped production at its offshore Tamar natural gas field near Israel’s northern coast, after being instructed so by the Israeli government, due to safety concerns as the conflict in the region intensifies.

The Tamar field is believed to hold more than 300 billion cubic metres of gas.

At the same time, workers at Chevron Corp’s liquefied natural gas facilities in Australia were reportedly planning to resume strikes.

European gas prices also jumped following news that the Balticconnector offshore gas pipeline was damaged between Finland and Estonia. The leak resulted in the shutdown of gas flow, and the repair work could take several months.

Should Europe worry about gas supplies?

Gas storage across Europe is filled at more than 90% capacity, including a large amount of gas inherited from winter 2022/23. There are also additional volumes being stockpiled in Ukrainian storage facilities.

There is also a high probability, signalls the Copernicus Climate Change Service, that Europe will have a very mild winter, potentially reducing the demand for heating fuels. 

However, as sabotage is suspected to be behind the Balticconnector pipeline leak, concerns have been raised over the vulnerability of European pipeline infrastructure.