Euro Gas Prices Slide as Alternative Shipping Routes Reduce Supply Anxieties

European wholesale natural gas prices continued to slide on Monday, dropping over 2% as evidence mounted that maritime tankers were finding alternative routes around Persian Gulf choke points.

The benchmark Dutch front-month TTF contract fell 2.5% to trade at 77.55 euros per megawatt-hour (MWh), building on last week's multi-session pullback. In Great Britain, the equivalent NBP wholesale gas contract slid 2.91% to reach 192.36 pence per therm, anchoring near multi-week low watermarks.

The European Central Bank (ECB) issued a warning that wholesale gas shocks are now feeding into inflation faster. According to an Economic Bulletin published on Monday, the ECB revealed that wholesale natural gas price changes will now feed into consumer gas inflation within 1 to 3 months in over half of euro area countries, a significant acceleration compared to 2022.

This has added pressure on Frankfurt as headwinds for monetary policymakers intensify. Eurozone inflation remains above 3% and some economists project a rise toward 4% by year-end, raising the stakes for ECB President Christine Lagarde.