European natural gas prices slipped below €79/MWh on Monday, retracing some of the sharp gains from the previous session as traders assessed diplomatic efforts to defuse tensions in the Middle East. US President Donald Trump signaled he would likely be open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the United Nations General Assembly later this week, though Tehran has not yet responded. Any steps toward de-escalation could help alleviate fears of prolonged LNG supply disruptions.
Nonetheless, supply risks remain elevated, with the ongoing conflict still constraining LNG shipments through the Strait of Hormuz. European gas storage levels stand at around 68.5% of capacity, below the seasonal norm. The outlook is further clouded by intense competition for LNG cargoes from Asia and continued maintenance on Norway’s gas infrastructure. With the heating season approaching, the market remains highly sensitive to any prolonged supply interruptions, keeping the risk of renewed price volatility elevated.