European Gas Prices Rise to 3‑Week High

European Gas Prices Rise to 3‑Week High

European benchmark natural gas prices touched a three‑week high on Friday. The front‑month Dutch contract, after briefly reversing its earlier decline, traded 0.2% lower at €43.89 per megawatt‑hour, marking the highest level since mid‑June. The comparable British contract fell to 104.4 pence per therm.

Storage anxieties continue to dominate market sentiment. Although European gas storage levels remain historically stable, they have lagged behind the aggressive injection trajectories recorded over the past two years. Prolonged maintenance on Norwegian pipeline infrastructure combined with a fiercely competitive global market for liquefied natural gas (LNG) cargoes has slowed the pace of refills. An early‑summer heatwave sweeping southern Europe has further accelerated gas‑fired power generation to meet air‑conditioning demand, tightening the region’s supply margin.

Geopolitical developments have created a disconnect between oil and gas pricing. Diplomatic progress in Doha, culminating in U.S.–Iran peace talks, prompted a parallel drop in global crude benchmarks back to pre‑war levels. However, the European gas market remained supported by the slow injection season, with traders noting that physical LNG flows to Europe have not yet increased enough to offset internal supply bottlenecks. Shipping traffic through the Strait of Hormuz has begun to normalise, alleviating fears of a prolonged interruption to Qatari LNG shipments, yet the overall supply margin remains thin.