European wholesale natural gas prices declined for a third consecutive session on Thursday, reaching their lowest levels in more than a week following the end of a strike in France’s energy sector.
The benchmark Dutch front-month TTF contract fell 1.23% to approximately €76.98 per megawatt-hour (MWh), while Britain’s equivalent NBP wholesale gas contract declined 1.23% to around 191.00 pence per therm.
The price declines followed the conclusion of a 24-hour industrial action that had disrupted gas deliveries from France into the wider European network.
French energy unions began strike action on Tuesday, prompting Belgian terminal operator Fluxys to reduce gas sendout capacity at the Dunkirk liquefied natural gas (LNG) terminal, France’s largest import facility.
During the disruption, minimum sendout capacity was reduced from 9.4 gigawatt-hours (GWh) per day to 4 GWh per day.
Following the end of the strike, operations at French gas and nuclear facilities began returning to normal, while regasification activity at Dunkirk started recovering towards its previous capacity.
The restoration of gas flows through cross-border interconnectors contributed to lower prices in European wholesale markets, although supply risks associated with the Persian Gulf remained a concern.
EU Gas Storage Reaches 68.5% of Capacity
Despite the recent decline in wholesale prices, European gas inventories remain below their historical seasonal levels.
According to Gas Infrastructure Europe, underground natural gas storage facilities across the European Union were 68.5% full.
Storage levels were approximately 16 percentage points below the five-year seasonal average as the injection season approached its conclusion.
The storage shortfall remains a consideration for European energy markets ahead of the winter heating season, particularly given continuing uncertainty surrounding international gas supplies.
Monetary Policy and Energy Costs Remain in Focus
The decline in European natural gas prices coincided with a series of monetary policy decisions, including interest-rate increases by the European Central Bank and the US Federal Reserve.
Energy costs remain an important factor in inflation expectations, with wholesale gas market participants continuing to assess supply risks for the coming winter.
Although the end of the French strike has improved near-term supply conditions, below-average storage levels and geopolitical uncertainty remain relevant to the outlook for European gas prices.
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