European Natural Gas Prices Ease but Head for Fifth Weekly Gain

European and British wholesale natural gas prices declined on Friday following several sessions of gains, while both benchmarks remained on course for a fifth consecutive weekly increase amid concerns over Middle East supply routes.

The benchmark Dutch front-month gas contract fell 2.5% to around €77.60 per megawatt-hour. The decline followed five consecutive sessions of gains, with the contract reaching €79.64 per MWh on Thursday, its highest level since 2023.

The Dutch benchmark was up 12.1% for the week.

In Britain, the equivalent NBP wholesale gas contract declined 1.5% to 195.00 pence per therm after previously reaching around 198 pence. The UK benchmark was up 12.6% for the week, also marking a fifth consecutive weekly increase.

Middle East Shipping Risks Remain in Focus

Natural gas markets continued to assess the potential effect of military developments in the Middle East on global energy supplies.

Military exchanges between US forces and Iran have restricted tanker traffic through the Strait of Hormuz, which handles approximately 20% of global liquefied natural gas flows, primarily from Qatar.

The source also cited US strikes on Iranian oil tankers and an Iranian missile attack on a US base in Jordan. Iran-aligned Houthi forces seized the Yemeni port of Mocha, adding to concerns over shipping through the Red Sea.

Crude oil remained above $108 per barrel. The source said restrictions in the Persian Gulf have increased competition between European and Asian buyers for alternative LNG cargoes from the Atlantic basin.

European Gas Storage at Around 67%

Data from Gas Infrastructure Europe showed European underground gas storage at approximately 67% of capacity, below the five-year seasonal average.

The source attributed slower storage replenishment during August and early September to summer heatwaves, Norwegian pipeline maintenance and market pricing that reduced the economic incentive for near-term storage injections.

Higher European energy prices were also cited in connection with Thursday’s European Central Bank policy decision.

The ECB raised its deposit facility rate by 25 basis points to 2.50%, its second increase of the year, citing inflation risks associated with higher energy input costs.