FX.co ★ European Gas Prices Retreat

European natural gas prices declined to €77.3/MWh, pulling back from a more than three-week high after President Trump indicated the US would not resume military strikes on Iran before November’s midterm elections, easing fears of a near-term escalation.

Nonetheless, supply risks remain elevated. Iran has intensified tanker attacks in the Strait of Hormuz, a critical corridor for about 20% of global LNG trade, heightening concerns about the safety of maritime transits. At the same time, cooler weather forecasts for Northwestern Europe are expected to bolster heating needs, potentially lifting gas demand.

Europe’s gas inventories have been rising steadily in recent weeks, with storage facilities now about 73% full. However, this level remains below that of the same period last year. Regional gas network operators maintain that the system retains enough flexibility to cover winter demand, but caution that constrained LNG availability could drive storage below 30% by the end of the season, leaving the market more exposed to late-winter cold spells.

Despite Friday’s retreat, prices are still up more than 3% for the week, registering a second consecutive weekly gain.