European natural gas prices stabilised on Thursday, holding above the one-week lows reached in the previous session as traders weighed encouraging diplomatic developments in the Persian Gulf against continued challenges in rebuilding regional gas inventories.
The benchmark Dutch front-month contract was virtually unchanged at €65.61 per megawatt-hour, while equivalent British wholesale gas futures held broadly steady at 160.50 pence per therm.
The stabilisation followed a wider pause in the recent energy-market sell-off as investors assessed the potential impact of ongoing diplomatic efforts in the Middle East.
European wholesale gas prices had fallen around 3% on Wednesday alongside a sharp decline in global crude prices. The move followed reports that Washington and Tehran were making progress towards an interim ceasefire agreement that could include protections for commercial shipping through the Strait of Hormuz.
Sentiment received additional support on Thursday after Qatar’s Prime Minister travelled to Tehran to assist negotiations aimed at restoring unrestricted maritime transit through the strategically important waterway.
Brent crude also stabilised around $87.40 per barrel following four consecutive sessions of declines. The more stable oil market encouraged energy traders to adopt a cautious stance while awaiting clearer evidence that seaborne LNG and crude flows can return to normal.
European storage remains a key focus
Despite the more constructive diplomatic backdrop, Europe’s gas supply position remains relatively tight as the region moves closer to the autumn heating season.
Data from Gas Infrastructure Europe showed underground storage facilities across the bloc at approximately 62% capacity.
Strong electricity-generation demand during intense summer heatwaves, combined with delays to Qatari LNG cargoes, has slowed the seasonal pace of storage injections.
ING analysts have highlighted that injections remain behind schedule, potentially making it more challenging for European storage facilities to reach EU targets before colder weather arrives.
The situation could maintain a structural risk premium in European gas prices through the 2026/27 winter, even if geopolitical pressures continue to ease.
US LNG capacity could provide additional support
Energy markets are also closely following international supply trends ahead of the fourth quarter as European utilities continue competing with Asian buyers for spot LNG cargoes.
Strong US inventories offer a potentially supportive source of additional supply. UBS research indicates that American natural gas stockpiles are almost 8% above their five-year average, supported by robust domestic production.
Additional US LNG export terminals and pipeline infrastructure are expected to complete commissioning towards the end of the year, increasing America’s capacity to supply international markets.
Greater US export availability could help ease supply constraints in Western Europe, particularly if major shipping routes remain open and secure.
With diplomatic efforts progressing and additional global LNG capacity expected to become available, European gas markets have potential sources of support even as traders continue monitoring the pace of storage rebuilding ahead of winter.
Leave a Reply