European Gas Prices Fall More Than 8% This Week as LNG Shipping Routes Adjust

European and British wholesale natural gas futures fell on Friday, putting both markets on course for their largest weekly declines since mid-June.

The benchmark Dutch front-month TTF contract and the equivalent UK NBP wholesale gas contract each declined 3.2% during Friday’s session.

Both benchmarks were on track for weekly losses of more than 8%, following increases earlier in September amid uncertainty surrounding energy supplies and shipping routes in the Middle East.

The latest moves came as LNG carriers and commercial shipping operators adjusted transit routes around the Arabian Peninsula in response to disruption affecting regional maritime traffic.

LNG Shipping Routes Adjust to Middle East Disruption

Changes to shipping routes have provided indications that LNG cargoes can continue to reach destination markets despite disruption affecting some established transit routes.

Gas markets have experienced significant volatility in recent weeks alongside developments involving the United States and Iran and concerns about the potential impact on energy infrastructure and shipping in the Persian Gulf.

Friday’s decline also followed gains earlier in the month, with some market participants taking profits ahead of the weekend.

No formal agreement between the United States and Iran has been reached, leaving the outlook for regional energy supplies dependent on further diplomatic and security developments.

EU Gas Storage at Around 70% of Capacity

European gas inventories remain below their levels from the corresponding period last year as the region approaches the winter heating season.

Data from Gas Infrastructure Europe showed underground gas storage across the European Union at approximately 70% of total working capacity at the latest reading cited.

Inventories were around 12 percentage points below levels recorded during the same period last year.

The difference means European gas markets remain exposed to changes in winter demand and potential supply disruptions despite the recent decline in wholesale prices.

Energy prices also remain relevant to the inflation outlook because changes in wholesale costs can feed through to consumer energy prices.

The European Central Bank has identified energy-price volatility as a factor that can affect inflation, leaving developments in European gas markets among the variables being monitored by policymakers.