Europe’s natural gas prices fell sharply on Monday, retreating from their 2024 highs reached last week. This decline followed Israel’s limited military response to an Iranian missile strike, which notably avoided targeting energy infrastructure in Iran.
At 1:45 p.m. in Amsterdam, Dutch TTF Natural Gas Futures, the key benchmark for Europe’s gas trading, were down 3% to $45.68 (42.20 euros) per megawatt-hour (MWh).
The futures prices had spiked last week due to concerns triggered by an outage at the unmanned Sleipner B platform in Norway, as traders braced for potential military action against Iran. Despite this outage, Norway’s energy giant Equinor reassured the market that it would continue to meet its gas supply commitments. The overall gas supply from Norway, Europe’s largest supplier, remained stable.
Last week, fears of supply disruptions, particularly from the Middle East, had pushed European natural gas prices up significantly, marking their largest weekly gain since August. However, Israel’s measured response over the weekend, which did not target energy infrastructure, alleviated some of these concerns. Consequently, both European gas prices and international oil prices declined.
Tensions further eased after Iran’s Supreme Leader, Ayatollah Ali Khamenei, indicated that Iran would not retaliate directly against Israel’s strikes. This softening of rhetoric from Iran suggests a potential start to de-escalation, reflected in the drop in oil and gas prices.
Currently, supply concerns for Europe have lessened, particularly as the EU’s gas storage sites are 95% full, surpassing the 90% target well ahead of the self-imposed November 1 deadline. Additionally, weather forecasts for the next two weeks predict milder temperatures in northwest Europe, which may lead to decreased gas demand for heating.
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