Euro Gas Futures Cool as Geopolitical Fears Recede

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Futures Pull Back From Two-Week Highs

European wholesale natural gas prices eased on Friday, interrupting a multi-session rally as market participants reacted to comments from U.S. President Donald Trump ruling out military action against Iran ahead of next month’s congressional midterm elections.

The benchmark Dutch front-month contract fell 1% to 78.00 euros per megawatt-hour (MWh), paring weekly gains after having tested the €80 mark in earlier trading. In the United Kingdom, the comparable wholesale gas contract declined 1.0% to 193 pence per therm.

Even with Friday’s modest decline, both contracts remained poised for a second consecutive weekly advance, holding close to their highest levels in more than two weeks. Ongoing security concerns in key Middle Eastern shipping lanes continued to underpin a sizable risk premium across winter-dated gas contracts.

Trump’s Comments Ease Immediate Escalation Fears

The intraday retreat in prices followed overnight remarks from President Trump indicating that the United States would not carry out strikes against Iranian targets before the November midterm elections. The statement helped temper expectations of an imminent and severe military escalation that could disrupt, or potentially halt, energy flows out of the Persian Gulf.

However, Reuters tracking data showed that missile and drone attacks on commercial and energy vessels in the vicinity of the Strait of Hormuz reached their highest weekly count last week since the onset of the regional conflict. The continuing pattern of maritime incidents undermined hopes for a quick restoration of normal Liquefied Natural Gas (LNG) traffic through the vital chokepoint.

As a result, war-risk insurance premiums remained elevated, and LNG carriers continued to divert onto longer, more expensive routes around Africa.

Storage Constraints and Weather Risks Support Prices

Fundamental factors also provided support for European gas markets. Updated meteorological projections for Northwestern Europe indicated cooler autumn conditions, raising the prospect of an earlier-than-expected ramp-up in both heating and power generation demand.

Underground gas storage sites across the European Union were at 73% of capacity. Inventories have increased from 66% a month earlier, but storage still lagged behind typical levels for this point in the year, leaving the region with limited buffer ahead of peak winter consumption.

According to regional gas network operators, the current system is sufficiently flexible to handle early-season demand. Nonetheless, they cautioned that if LNG imports remain constrained, storage could fall below 30% by late winter, heightening vulnerability to any late-season cold spells.

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