European natural gas prices were trading %10.5 lower on a weekly basis Friday as easing concerns over LNG supply disruptions through the Strait of Hormuz subdued seasonal demand and continued storage injections weighed on the market.
The front-month October contract at the Dutch TTF, Europe's benchmark gas hub, closed at €79.51 per megawatt-hour last Friday.
The contract was trading at €71.16 per MWh at 3:14 p.m. local time (1214 GMT), down 10.5% from the previous week's close.
Prices fell sharply early in the week after reports that Iran could reopen the Strait of Hormuz if the United States lifted its blockade of Iranian ports and diplomatic efforts resumed.
The prospect of the waterway reopening raised expectations that LNG flows through the Strait could resume, easing concerns over global supply.
Prices recovered later in the week as expectations for rapid progress in US-Iran contacts faded. TTF prices rose to €74.94 per MWh on Thursday as uncertainty over LNG shipments through the Strait of Hormuz returned to the market.
Still, relatively weak seasonal gas demand ahead of winter and continued injections into European storage facilities kept downward pressure on prices.
- Storage levels remain below last year's
Gas Infrastructure Europe data showed EU gas storage facilities were around 70% full, compared with more than 80% at the same time last year. GIE's Sept. 24 data put EU storage at 70.24% of capacity.
Although storage levels remain below last year's level, continued injections and relatively subdued seasonal demand have helped contain upward pressure on prices as Europe heads into the winter.
The European Commission said earlier in September that there was no immediate risk to EU gas supply security despite lower storage levels, citing increased LNG import capacity, greater supply diversification and lower gas demand as factors supporting the bloc's resilience.
Analysts expect competition between Europe and Asia for alternative LNG cargoes to persist if LNG flows through the Strait of Hormuz do not return to normal, potentially keeping upward pressure on European gas prices.
- Commission reaffirm stable gas supply
The European Commission's Gas Coordination Group met on Sept. 24 to take stock of current gas market conditions and winter preparedness.
At its previous meeting on Sept. 3, the Commission and EU member states said there was no immediate risk to security of gas supply despite storage levels being lower than in previous years. The Commission said the EU was better prepared than during the 2021-2022 energy crisis because of increased supply diversification, higher LNG import capacity and reduced gas demand.
The Commission said the Gas Coordination Group will continue to monitor the gas market and winter preparedness, with its next meeting scheduled for Oct. 8.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr
