European wholesale natural gas prices declined on Friday, retreating from two-week highs after US President Donald Trump indicated that Washington would not launch military strikes against Iran before November’s congressional midterm elections.
The benchmark Dutch front-month natural gas futures contract fell 1% to €78.00 per megawatt-hour (MWh), easing after approaching €80 during previous trading sessions.
In Britain, the equivalent wholesale gas contract declined 1.0% to 193 pence per therm.
Despite the pullback, both contracts remained on course for a second consecutive weekly increase, reflecting continued uncertainty over energy shipments from the Middle East and the outlook for European winter supplies.
Trump’s comments reduced immediate concerns about a further military escalation involving Iran, although the wider regional conflict continued to affect maritime transport and energy markets.
The US president indicated that military strikes against Iranian targets would not take place before the November midterm elections.
The statement was followed by a moderation in gas prices, although risks associated with shipping through the Strait of Hormuz remained a significant consideration for energy traders.
According to Reuters tracking data, missile and drone attacks targeting commercial and energy vessels near the Strait of Hormuz reached their highest weekly total since the beginning of the regional conflict during the previous week.
The continuing attacks have complicated efforts to restore normal liquefied natural gas (LNG) shipments through the waterway, which serves as an important transit route for energy exports from the Persian Gulf.
Security concerns have also contributed to higher war-risk insurance costs and longer shipping routes, with some vessels being diverted around Africa.
Such disruptions can increase transportation expenses and affect the timing of LNG deliveries to importing markets, including Europe.
Alongside geopolitical developments, European gas traders continued to assess weather forecasts and regional storage levels ahead of the winter heating season.
Updated meteorological forecasts pointed to cooler autumn temperatures across northwestern Europe, potentially bringing forward demand for residential and commercial heating.
Lower temperatures could also increase natural gas consumption for electricity generation, depending on broader power market conditions.
European Union underground gas storage facilities were reported to be 73% full, compared with 66% approximately one month earlier.
Although inventories have increased over the past month, the reported storage level remains below historical norms for this point in the year.
The relatively limited volume of stored gas could increase Europe’s exposure to supply interruptions or periods of unexpectedly strong demand during the winter.
Regional gas network operators have indicated that existing infrastructure retains sufficient flexibility to meet demand during the early part of the heating season.
However, they have also warned that restrictions on LNG imports could reduce European storage levels to below 30% by late winter.
Such an outcome would leave the region more vulnerable to prolonged cold weather towards the end of the heating season.
The projections remain conditional on future import volumes, weather conditions and consumption patterns.
Friday’s decline in wholesale gas prices therefore reflected a moderation in immediate geopolitical concerns rather than a resolution of the supply risks affecting European energy markets.
Developments in Middle Eastern shipping routes, LNG availability, weather forecasts and storage inventories are likely to remain important influences on European gas prices over the coming months.
Leave a Reply