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[Low European Gas Inventories Amid Combined Economic and Political Pressures] ⑴ Lagging gas restocking in Europe, coupled with near-historic high prices for refined oil products like diesel, is putting increasing pressure on governments to curb public discontent and the rise of far-right forces. ⑵ This problem is particularly pronounced in Germany, where the Alternative for Germany (AfD) won a state election last week, with its platform calling for peaceful coexistence with Moscow and the restoration of cheap Russian gas contracts. ⑶ If the party gains further ground in this weekend's state elections, it will increase pressure on Chancellor Merz, making him more passive in considering costly measures to lower fuel prices. ⑷ Industry data shows that European gas inventories are about 69% full, lower than the average of about 85% over the same period in the past five years. ⑸ Germany and the Netherlands together account for about 35% of the EU's storage capacity, but restocking is significantly lagging behind. High energy prices are discouraging private companies from buying, and governments have not enforced national gas storage targets. ⑹ Analysts say the market previously bet that the Middle East conflict would end quickly and prices would fall, allowing for affordable restocking, but this assessment is becoming increasingly unreliable. (7) Some strategists point out that for every month Europe delays restocking, price pressures will increase as the peak winter gas consumption season approaches. (8) Compared to the energy shock of 2022, the current economic situation is less critical in some respects. Countries have diversified their energy sources, and a softening labor market has limited wage demands, helping to curb inflation. (9) However, governments are still hoping for a mild winter. The European Central Bank raised interest rates last week, and policymakers warned that if energy price pressures do not subside, further rate hikes may be necessary. (10) With global oil prices rising above $100 per barrel, EU gasoline prices have increased by about 24% year-on-year, diesel by about 38%, and aviation fuel costs by over 100%. (11) The benchmark price for natural gas is approximately €81 per megawatt-hour, up about 150% year-on-year, higher than the European Central Bank's adverse scenario forecast, with risks skewed towards higher readings. (12) Some institutions predict that, depending on the weather, gas prices could rise to €100 per megawatt-hour, and say that relying on weather to ensure supply is a high-risk bet.