European Natural Gas Prices Slump 7%

European natural gas prices fell 7% to €74 per megawatt-hour, the lowest in two weeks, after details of Germany’s latest gas storage tenders indicated lower volumes than initially expected. Trading Hub Europe launched several tenders to secure sufficient gas availability for the first quarter of 2027, amid concerns over storage levels ahead of winter. Also, weather forecasts point to a late-summer heat spell next week, with temperatures across Northwest Europe expected to rise around 6°C above normal, potentially reducing gas demand. Additionally, President Donald Trump signaled that US-Iran diplomacy could resume, including the possibility of meeting Iran’s president during the UN General Assembly in New York. Progress toward ending the conflict could reduce concerns about potential disruptions to energy flows through the Strait of Hormuz, an important route for global LNG shipments.

European natural gas prices fell below €77/MWh on Monday, erasing most of the previous session’s gains as traders monitored diplomatic efforts to end the Middle East conflict. President Donald Trump said he would probably be open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the UN General Assembly later this week, though Tehran has yet to respond to the remarks. Any progress toward de-escalation could ease concerns over prolonged LNG supply disruptions. However, supply risks remain elevated, with the conflict continuing to restrict LNG shipments through the Strait of Hormuz. European gas storage facilities were around 68.5% full, still below the seasonal average. The situation is further complicated by intense competition with Asia and ongoing maintenance work on Norway’s gas infrastructure. With the heating season approaching, the market remains highly sensitive to extended supply disruptions, increasing the risk of price volatility.

European natural gas prices rose to €79/MWh on Friday, rebounding after three consecutive sessions of losses, with depleted reserves and disruptions to LNG shipments remaining in focus. The region is entering winter with low storage levels as the US-Iran war severely curtailed LNG supplies from the Persian Gulf and record summer heatwaves hampered efforts to rebuild inventories. Underground storage facilities were only around 68% full, well below seasonal averages and the EU’s target of 80% capacity by December. Strong demand from Asia and other buyers could also drive more intense competition for LNG cargoes when colder weather sets in, leaving the region more exposed to price spikes. European gas prices have nearly tripled so far this year and reached their highest level since December 2022 earlier this week. Despite Friday’s rise, European gas prices were down more than 2% this week, their first weekly drop in six.