EU Gas Futures Ease Post-5-Week Rally as Supply Rises

Key Moments

Futures Rebound Intraday but Weekly Trend Turns Lower

European and UK wholesale natural gas prices firmed on Friday, but the late-session recovery was not enough to prevent an end to a five-week winning streak. Gains were capped as a short-lived improvement in physical supply across key European import points counterbalanced persistent geopolitical risks in the Middle East.

The benchmark Dutch front-month TTF contract rose 2% during Friday’s session to trade around 78.50 euros per megawatt-hour (MWh), rebounding from its lowest level in more than a week reached on Thursday. Even with the intraday rise, the contract was on track to interrupt its longest sequence of weekly advances in four years.

On a weekly basis, Dutch TTF futures were set for a decline of about 1.8%, interrupting a multi-week uptrend that had driven European gas prices to new highs for the year.

In the UK, the front-month NBP contract matched the move with a 2% gain on the day, trading near 195.00 pence per therm. Nonetheless, the British benchmark was also positioned to break a five-week stretch of weekly gains, with a projected weekly loss of roughly 1.9%.

Labor Dispute Resolution in France Eases Supply Strain

The key factor behind the weekly pullback in prices was the resolution of a labor dispute in France’s energy sector. Industrial action had previously hampered regasification and sendout operations at the Dunkirk LNG terminal, France’s largest liquefied natural gas import hub.

Those disruptions had sharply reduced export flows from Dunkirk into Belgian and German networks before operations were restored to more normal levels in the middle of the week. The normalization of these flows contributed to easing immediate supply concerns and weighed on benchmark futures over the course of the week.

Geopolitical Risks Continue to Support Market Nerves

Friday’s 2% rebound in prices reflected ongoing market unease regarding the seven-month Iran war, which, according to the article, has shown limited indications of imminent de-escalation despite diplomatic efforts.

Attacks on Saudi oil pipeline assets, together with continued Houthi activity in the Red Sea, have constrained LNG carrier movements through the Strait of Hormuz. These conditions have compelled global LNG shippers to divert vessels via more expensive alternative routes, maintaining a risk premium in gas pricing despite the recent supply relief in Europe.

Storage Levels Highlight Structural Vulnerabilities

Beyond the short-term drivers, structural inventory levels remain a central concern. Data from Gas Infrastructure Europe indicated that underground gas storage across the European Union was around 68.5% full. This coverage level leaves utilities on the continent exposed to potential cold spells as autumn approaches, reinforcing sensitivity to both supply disruptions and demand spikes.

Monetary Policy Backdrop and Energy-Driven Inflation Concerns

The recent trajectory of natural gas prices has also intersected with monetary policy decisions. Following rate hikes by both the Federal Reserve and the European Central Bank, policymakers at the ECB highlighted natural gas and electricity prices as primary contributors to pushing inflation in the Eurozone above 3%.

In contrast, the Bank of England left its main policy rate unchanged at 3.75% on Thursday. However, the central bank signaled that an increase to 4% in November remains probable if energy input costs do not ease, underscoring the central role of gas and power prices in shaping the inflation and interest-rate outlook.