Middle East Tensions Fuel Fourth Straight Weekly Gain in European Gas Prices
European gas prices rose more than 6% this week, marking their fourth consecutive weekly gain. The front-month October contract at the Dutch TTF gas hub, Europe's benchmark gas market, settled at 66.98 euros per megawatt-hour last Friday. By Friday afternoon, prices had risen to €71.08 per MWh, putting them on track for a weekly gain of over 6%. Renewed tensions in the Middle East have heightened concerns over energy security and contributed to the rally in European gas markets.
The increased uncertainty surrounding shipping through the Strait of Hormuz has raised concerns about LNG supplies from Gulf producers to Europe. This is slowing the pace of replenishment of European gas inventories, which are already below levels seen in previous years ahead of the winter heating season. Gas Infrastructure Europe (GIE) data showed EU gas storage facilities were 65.85% full as of Friday.
Analysts warn that further disruptions to LNG supplies, stronger competition between European and Asian buyers, and relatively low storage levels could leave European gas prices vulnerable to sharper gains in the coming period.