Europe Gas Traders Buy Options to Hedge for Winter Price Spike

Some European natural gas traders are already hedging against a spike in prices next winter as the war in the Middle East continues to disrupt supplies.

Options contracts traded over the past week suggest that European benchmark gas prices could reach as high as €100 a megawatt-hour next winter — more than double the current level — when fuel consumption surges. The wagers reflect growing confidence among traders that a lengthy conflict could jeopardize the already slow efforts in Europe to refill inventories ahead of next winter.