German Natural Gas Futures Edge Down

German natural gas futures traded around €37 per megawatt-hour, below a seven-month high of €40.3 reached on January 23, as LNG supply concerns eased and near-term US weather forecasts turned milder, reducing heating demand and freeing more gas for exports. Europe relies on LNG for roughly half of its gas needs after losing most Russian pipeline supplies, with the US supplying about 27% of EU gas and LNG imports in 2025, making prices sensitive to American supply conditions. Geopolitical risk premiums also declined after President Donald Trump said the US is in talks with Iran, easing fears of disruptions to LNG and oil shipments through the Strait of Hormuz. Despite these factors, EU gas storage remains at just 41.1% full and Germany at 32.4%, far below last year’s level and the five-year average, leaving the market vulnerable to renewed cold or supply shocks.

German natural gas futures rebounded to above €40/MWh, moving back toward the highest level since June 2025, as low storage levels and colder weather expectations intensified supply concerns. Europe’s gas inventories are around 44% full, close to the lowest for this time of year since 2022, with Germany even tighter at about 35.1% after strong heating demand. Also, recent disruptions to US LNG supply tightened availability for Europe, which sourced more than half of its LNG from the US last year. Freeport LNG in Texas reduced feedgas over the weekend and is discussing possible cargo rescheduling with buyers despite a gradual recovery in flows. EU officials have warned about growing dependence on US LNG and are seeking alternative suppliers. Geopolitical risks added to the bullish tone after President Donald Trump warned Iran to reach a nuclear deal or face military strikes, raising fears of potential disruptions to LNG and oil shipments through the Strait of Hormuz.

German natural gas futures fell below €40 per megawatt-hour, tracking the TTF benchmark, as markets assessed the pace of US production recovery and the potential for further extreme cold. In the US, warmer forecasts and the gradual return of frozen wells have slightly boosted output, while LNG export flows remain low, with feedgas set to rise to 13.7 bcfd on Tuesday after falling to a one-year low of 11.6 bcfd on Monday. TTF prices continue to trade at a healthy premium to Asian LNG to attract cargoes to Europe. Rapid withdrawals amid cold weather have pushed EU storage below 45%, compared with 56.2% a year ago, with Germany at 36.8%, down from 58.4%. Looking ahead, forecasts call for colder conditions until February 6 and milder weather from February 8-18, while north-west European wind generation is expected above normal until February 4 before dropping below normal through at least February 10.