Natural gas prices in Europe declined amid supply expectations
Expectations that talks between the US and Iran could reduce risks in the Strait of Hormuz and limited pre-winter demand caused gas prices in Europe to fall on a weekly basis.
Natural gas prices in Europe recorded a weekly decline thanks to expectations that US-Iran contacts could alleviate supply risks in the Strait of Hormuz and the limited course of pre-winter demand.
Change in Netherlands-Based TTF Prices
The megawatt-hour price of October futures contracts on the Netherlands-based TTF, which is accepted as the reference for natural gas pricing in Europe, closed at 79.52 euros last Friday. Prices dropped by 10.5 percent during the week to 71.16 euros.
Strait of Hormuz and Supply Expectations
In the early days of the week, news reports regarding Iran's potential to reopen the Strait of Hormuz if it lifts the blockade against US ports and returns to diplomacy had an impact on the market. This development strengthened expectations that LNG flows could resume.
Fluctuation in the Second Half of the Week
The lack of rapid progress in contacts between the US and Iran led natural gas prices to rise again in the second half of the week. On Thursday, TTF prices climbed up to 74.94 euros, bringing uncertainties back to the agenda.
Seasonal Demand and Storage Status
The fact that pre-winter demand in Europe has not yet reached high levels and the continued entry of gas into storage facilities suppressed prices. According to Gas Infrastructure Europe data, the occupancy rate of storage facilities in EU countries stands at 70.35 percent.
European Commission and Gas Coordination Group Meeting
The European Commission's Gas Coordination Group evaluated market conditions and winter preparations. The Commission announced that natural gas supply in the EU remains stable even though storage levels are below historical averages. The group's next meeting will be held on October 8.