(Bloomberg) -- UK households are at risk of an “inflationary sting” if the natural gas market tightens as traders rush to replace stockpiles before winter, according to energy consultant LCP Delta.

Europe is increasingly reliant on global supplies to replenish its inventories, but liquefied natural gas shipments are being diverted to Asia where they can fetch higher prices. Geopolitical factors are also adding to concerns.

LCP Delta sees “worrying signs” that energy costs may rebound in the autumn, Sam Hollister, head of economics, policy and investment, said in a report. Wars in Ukraine and the Middle East are contributing to “fervor among traders of a possible tightening of supply later this year as the heating season nears.”

Britain had been wrestling with rising energy costs even before Russia’s 2022 invasion of Ukraine sent gas prices soaring and kicked off a region-wide crisis. The UK lacks significant gas storage and relies on Europe’s infrastructure to meet its energy needs. A cold winter means higher consumption of the fuel for heating, which could raise prices on both sides of the English Channel.  

For now, UK gas futures are slightly below their historical average, and energy bills across the country are actually set to drop in early July. Inflation has fallen back to the Bank of England’s 2% target for the first time in almost three years. But persistent signs of stickiness in the economy show lingering pressures on underlying prices. 

Energy consultant Cornwall Insight Ltd. expects bills to increase slightly in October — when the UK’s energy price cap is updated — coinciding with higher winter demand.

Europe’s storage facilities are currently 73% full, higher than usual for the time of year. Yet fears persist over unexpected outages, heat waves and the fate of Russia’s remaining piped flows. The next two months will be crucial, according to LCP Delta’s Hollister.

“If storage levels aren’t replenished now, we could see a dash for gas later this year as we hit prime heating season,” he said. “This could result in an even bigger leap in the January energy price cap.”

(Updates with latest UK inflation figures in fifth paragraph.)

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