European and British wholesale natural gas prices traded near three-week lows on Wednesday following declines earlier in the week, as markets monitored developments surrounding the Strait of Hormuz and European gas storage levels.
The benchmark Dutch front-month TTF contract declined 0.6% to €72.90 per megawatt-hour, remaining around its lowest level since early September.
In the UK, the equivalent NBP wholesale gas contract rose 0.4% to 183.00 pence per therm, while remaining near recent multi-week lows.
Iran Sets Conditions for Reopening Strait of Hormuz
The moves followed comments from Iranian officials indicating that Tehran could reopen the Strait of Hormuz to commercial shipping within seven days.
Iran has said that any reopening would depend on the United States easing military pressure and lifting its blockade of Iranian ports.
The comments come as U.S. and Iranian officials pursue diplomatic contacts in New York during the United Nations General Assembly.
The prospect of increased shipping through the Strait has coincided with declines in both natural gas and crude oil prices from levels reached earlier in September.
EU Gas Storage Around 70% Full
Data from Gas Infrastructure Europe showed underground natural gas storage facilities across the European Union at around 70% of capacity.
Inventories have been rebuilding but remain approximately 12 percentage points below their level a year earlier.
The storage position remains a focus for European energy markets ahead of the winter, particularly in relation to potential changes in demand and supply.
Energy Prices Remain a Factor for Inflation Outlook
Energy prices also remain relevant to the eurozone inflation and monetary policy outlook.
The European Central Bank has highlighted the potential for changes in wholesale energy prices to feed through to consumer inflation.
Further movements in European natural gas prices are therefore likely to remain among the factors monitored by investors assessing the outlook for inflation and interest rates.
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