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Key Moments
- Dutch TTF front-month gas futures held at 50 euros per megawatt hour. British contracts also stayed steady at 121 pence per therm.
- Meanwhile, tensions around the Strait of Hormuz increased concerns about LNG supply. Europe continues to rebuild gas storage, which is now about 43% full.
- In addition, markets expect the European Central Bank to raise rates by 25 basis points. This outlook adds pressure to already weak eurozone industrial gas demand.
Benchmark Contracts Hold at Key Levels
European natural gas prices stayed steady on Thursday. Traders continued to watch geopolitical risks from the U.S.–Iran conflict. The situation entered a second day with no clear signs of de-escalation.
In addition, data from the Intercontinental Exchange showed stable pricing. The Dutch TTF Natural Gas Futures contract held at 50 euros per megawatt hour. Meanwhile, British Natural Gas Futures remained unchanged at 121 pence per therm.
| Contract | Exchange / Benchmark | Price | Unit |
|---|---|---|---|
| Dutch TTF Natural Gas Futures | ICE | 50 | euros per MWh |
| British Natural Gas Futures | — | 121 | pence per therm |
From Russian Pipelines to LNG: New Supply Risks
Europe has shifted away from Russian pipeline gas. Instead, it now depends heavily on global LNG supply. As a result, the region faces new geopolitical risks.
Moreover, tensions around the Strait of Hormuz have raised supply concerns. Market participants now fear disruptions to LNG shipping routes. These risks could tighten global supply further.
At the same time, traders worry about competition for LNG cargoes during the summer. Europe is trying to rebuild storage after slower injection rates. According to Reuters, storage levels stand near 43% of capacity. Therefore, restocking could become more difficult if disruptions continue.
Monetary Policy Risks to Demand and Growth
The energy shock is unfolding alongside tighter monetary policy in the eurozone. The European Central Bank is widely expected to raise interest rates by 25 basis points. This move aims to control inflation pressures linked to higher energy costs.
However, higher rates could weaken economic activity. In turn, industrial gas demand may fall further. As a result, the eurozone economy risks deeper contraction heading into winter.
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